BANKING INDUSTRY MAKES LONG-TERM COMMITMENT TO IMPROVING FINANCIAL LITERACY Sydney, 9 December, 2003: The banking industry today announced it has committed to a long-term strategic priority of helping improve Australians’ financial literacy.   The program called “Broadening Financial Understanding” is aimed at helping Australians make informed judgements and effective decisions about the use and management of their money.   The first initiative is a new publication for consumers, “Smarter Banking – Make the Most of Your Money” which is designed to assist consumers choose a bank account that suits their needs.   At today's launch in Sydney, Chairman of the Australian Bankers’ Association (ABA), John McFarlane, said: “Empowering people with the appropriate financial skills, knowledge and information ensures they are better placed to make informed decisions about their money and avoid being misled on financial matters.” “While we know many Australians have a good foundation of basic skills and some banks have been undertaking financial literacy education for many years, it is very clear there remain challenges.  These include helping increase understanding in the areas of investment, superannuation and retirement planning, and in assisting the most vulnerable sections of the community, many of whom are struggling with financial skills.”   “Helping Australians achieve a greater understanding of these issues is now a long-term objective for the industry and starting that work is my priority as Chairman of the ABA.”   “We have made a start today by launching a booklet to help people understand their banking.  There is clearly much more we need to do together as an industry and among the banks individually.  I’m very pleased that government, regulators and the consumer movement also share this view, and collectively I believe we can make a real difference on this issue.”   “I also acknowledge that the industry itself has much work to do in ensuring the information it provides its customers is clear and easily understood. The dangers of selling financial products to customers who may not fully understand them are very clear.  Our customers lose in situations where they buy products that may be more costly or risky than they understood. We lose by having dissatisfied customers and, in the worst cases, by regulatory intervention and fines.  The thousands of banking and investment products for sale today mean we must do more to ensure that customers fully understand what they are buying.”    “Today marks the first steps in what I am sure will be a concerted long-term effort by the industry to achieve real change on these issues,” Mr McFarlane said.   Chris Field, Executive Director Consumer Law Centre of Victoria, said: “This is a very welcome initiative by the Australian banking industry.  Lack of financial understanding is a problem for government, industry and consumers alike.  For that reason, I strongly support a collaborative response to the problem.”  “Improved financial understanding is good for consumers.  Better informed consumers are better protected consumers.  Moreover, more informed consumers are able to exercise effective choice so enhancing competition in the Australian financial services industry."   David Bell, Chief Executive of the ABA, said: “The ABA plans to build a range of communications activities based on ‘Broadening Financial Understanding’ and will seek to build partnerships with other groups who want to increase Australians understanding of personal finance. This will lead to a major conference on financial literacy in early 2004 involving all stakeholders.”   “It’s important that consumers have relevant information when they need to make financial decisions, for example, buying a house, saving for retirement or saving for a personal goal.”   The launch of the banking industry’s program follows the release earlier this year of a nationwide survey of financial literacy that identified a range of needs in banking and superannuation.   David Bell, Chief Executive of the ABA, said: “This new publication forms part of a significant effort on behalf of the industry and builds on the many projects which individual banks already offer.”   “For the industry collectively, this is just the first step and Australians will see us doing more in the weeks and months ahead.”   The ABA will lay the foundations for the program through broad community consultation and input as to consumers’ needs.  The ABA is also planning to provide a hub website where consumers will be able to access the financial literacy resource materials of the ABA member banks.   Mr McFarlane thanked Senator Helen Coonan, Minister for Revenue and Assistant Treasurer, for attending today’s launch, and welcomes her on-going participation in the banking industry’s financial literacy programs.   For further information:   Heather Wellard ABA Public Relations Phone: 02 8298 0411 Mobile: 0409 830 439     Chris Field Executive Director Consumer Law Centre Victoria Mobile: 0419 598 836.   To obtain a copy of “Smarter Banking – Make the Most of Your Money” please call toll free: 1800 009 180 and we’ll send you a copy. You can also see the publication online at the ABA website: www.bankers.asn.au.   Notes for editors:   Individual banks’ financial literacy publications and programs   Coda: Publications, Programs   Bank Initiative More information on website   ANZ Borrowing to Buy a Home? Taking Control – a practical guide to the ins and outs of transaction banking for your business   www.anz.com   Buying a Home – Free Public Seminars     Citigroup – parent company for a range of businesses in Australia including Citibank                                           Finance First Finance First is a financial literacy education project that will research, develop, implement and evaluate a financial literacy education program, for families from low-socio economic backgrounds in new south wales.   Finance First is the first financial literacy education program in Australia to target adults and children simultaneously. It is also the first program to target primary school aged children (6-12 year olds).   Citigroup Australia and YWCA NSW have formed a two-year corporate community partnership to manage the project.     The Australian Retiree’s Financial Survival Handbook General banking brochure - helping you make the most of your money   www.citigroup.com.au   Commonwealth Bank Handling Your Credit Card Banking Made Easy Managing Your Finances Online The Better Banking Book Investing with the Commonwealth Bank Your Complete Guide to Buying a Home www.commbank.com   COMMONWEALTH BANK FOUNDATION E-LEARNING GRANTS MATHS COMPETITION GIRL SAVVY NATIONAL LITERACY AND NUMERACY WEEK   STUDENT BANKING SCHOOLS VISIT PROGRAM INDIGENOUS STUDENTS BANKING MADE EASY FOR OLDER PERSONS SEMINAR PROGRAM YOUNG FARMERS – FINANCIAL INFORMATION AND SCHOLARSHIPS COMMSEC INVESTOR EDUCATION WORKSHOPS     Commonwealth Bank DOLLARS AND SENSE – FINANCIAL INFORMATION FOR YOUG PEOPLE www.dollarsandsense.com.au   National Australia Bank About to Retire Focusing on the elements of investing Is Super Still Super? My Word It Is Master Funds – the Investment Supermarket, giving you choice and making it easy Retirement Smoothing the Peaks and Troughs Sound Retirement Strategy in place – way to go Superannuation Superannuation made Simple The Treasurer’s Handbook for Non-Profit Organisations Understanding Your Asset Class Balance   www.national.com.au     Community Link National Online Teaching National Perspective Protection Detection     St George A Guide To Tax and Other Issues When Leaving Work Choosing a Financial Planner Your Guide to Estate Planning   www.stgeorge.com.au     Wesley Mission Credit Line     Westpac Australian Maths Competition Young Achievement Australia Business Skills Program Financial Skills Program www.westpac.com.au       ENDS