Digital financial literacy lags among seniors, low income earners

Although Koreans’ level of financial literacy has improved compared to 2020, their ability to navigate financial services with the skills needed to use digital technologies remains low, particularly among seniors and low-income earners, the Bank of Korea (BOK) reported on Wednesday.

According to recent data, released by BOK, Korean adults recorded an average score of 66.5 out of 100 in their financial literacy test. It showed a slight improvement from 2020, when the average score was 65.1.

On the digital financial literacy test, however, the results were significantly lower, with an average score of 42.9. In particular, respondents aged above 70 scored just 36, those in low-income brackets managed slightly better, at 39.4 and those with less than a high school education achieved 35.9, the lowest score.

The bank researched digital financial literacy for the first time this year, as digital technology is having a massive impact on the industry.

By age, people in their 30s scored the highest marks, with scores tending to decrease as people got older. In terms of income, those in the high-income bracket displayed greater digital financial literacy compared to those in the middle and low-income brackets. Furthermore, individuals with higher levels of education achieved higher scores than those who did not complete high school.

“We will strengthen basic financial education to assist low-income earners and seniors amid the fast-changing financial environment,” the bank said. “We will also induce them to utilize professional financial information so that they won’t experience harm by exaggerated advertising and incomplete sales.”

Last year, the central bank surveyed 2,400 adults aged from 18 to 79. The survey was conducted using investigation methods that are used in every member state of the Organisation for Economic Cooperation and Development (OECD), to compare each country’s financial literacy and set guidelines for financial education.