The Institute for Capital Market Research Malaysia (ICMR) has recently published its research findings on the effectiveness of online financial education interventions for Malaysian youths. The primary takeaway of the report is that online financial education is effective, although financial literacy and healthy financial habits were inadequate amongst respondents.
The study was conducted to build upon prior work to understand the financial needs and trends of various demographic groups. A 2021 study had shown that 22% of Millennials and Gen Zs do not invest in the capital market, while almost half of those that do invest only invest in Amanah Saham Nasional Berhad (ASNB) and Unit Trust products.
How the study was conducted
Participants were recruited online via Facebook and were required to answer pre-evaluation questions to determine their knowledge and confidence in financial literacy. They would then be randomly assigned to one of two types of financial education content: a three page article or seven minute video on seven key things to consider before investing.
Following this, participants were required to answer post-evaluation questions to measure any improvement in financial knowledge and investment confidence. Participants that show improvement then undertook a supplementary round of post-evaluation testing after a duration of 1.5 months to test for long-term effectiveness.
Study results
The results are interesting as it was found that both video and article methods resulted in around a 10% increase in the participants’ financial score. The interventions had also improved the respondents’ level of confidence to invest, being particularly impactful on those with lower confidence levels. However, it was noted that among the highest scoring participants, scoring lower to pre-assessment levels after 1.5 months; revealing low knowledge retention levels.
From the findings, the ICMR concluded that its research with policy recommendations that aim towards a more holistic approach to developing financial education strategies for high effectiveness and long-term impact. One such recommendation is the diversification of financial education content, especially with regards to various delivery formats.
ICMR also recommends that financial content should be short, straightforward, and continuously aligned with the average attention span (e.g. 2.5 minutes on screens) to facilitate micro-learning. In order to gain the largest reach possible to bridge knowledge gaps, it was also recommended that there be a continuous stream of financial education through platforms like social media and other accessible sources.
“As financial and investment products become more complex and varied, individuals will have to bear more risks and responsibility for their own financial decisions. This is a problem not only for the individuals concerned, but for Malaysia as a whole. ICMR’s study underscores the importance of innovative approaches to financial education to foster a culture of financial awareness and responsibility from an early age,” said Tan Sri Dato’ Dr. Mohd Munir Majid, Chairman of ICMR.
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