CySEC’s Elena Karkoti hails introduction of financial literacy course - "The interest from students is evident"

The introduction of a financial literacy course in schools is something the Cyprus Securities and Exchange Commission (CySEC) has long advocated for, while the interest shown by students in lectures that were conducted over the previous academic year has been evident, according to Elena Karkoti, Officer A at CySEC and responsible for Financial Education of the Public.

“At CySEC, we have consistently advocated for the inclusion of financial education in schools,” Karkoti told CBN when asked to comment on the Ministry of Education's decision to introduce the course. “Thus, we congratulate the Minister of Education for the Ministry's decision to launch an intervention program at the compulsory education level starting next school year. We also find it very important that the Ministry plans to further develop this program into a one-hour course that will eventually be fully incorporated into the school curriculum.”

The introduction of an independent course in schools is a key recommendation of Cyprus' National Strategy for Financial Literacy, which was approved by the Council of Ministers in June 2022. Regarding the development of the course curriculum, CySEC can provide advisory support and submit opinions within the framework of the Cyprus Committee for Financial Literacy and Education (CyFLEC), specifically within the relevant working group which will be chaired by the Ministry of Education.

“Ideally, at CySEC, we envision a course tailored to the needs of each age group being implemented at all educational levels in the future,” Karkoti explained. “The interest from students is evident. Our experience from the lectures we delivered this year was overwhelmingly positive, with students of various ages and university attendees showing significant interest and actively engaging with numerous questions. It is essential that we equip young people, the future citizens, with the necessary knowledge to make sound financial decisions. Our goal is to cultivate a new generation of citizens who are well-prepared to navigate the complexities of the modern economy.”

Based on CySEC’s experience as a regulatory authority and from the lectures at schools it held this year across various educational levels, the Commission believes it is crucial for children to grasp fundamental principles and skills related to financial management, said Karkoti. “For instance, they should learn how to draft a simple budget balancing their expenses and income, calculate how much they need to save, and appreciate the importance of maintaining an emergency fund. Other key concepts include understanding the risk-return relationship, the investment horizon, and the necessity of diversification in investments,” she pointed out.

Moreover, she added, it is vital for them to recognise that there are no legitimate "get-rich-quick" schemes and that numerous traps set by fraudsters lurk online and on social media, which they need to learn to identify and avoid.

According to Karkoti, parents also need to join in on this effort. “Outside of school, parents play a vital role in their children's financial education and can help them develop financial skills in several ways. For instance, by openly discussing financial topics, such as planning for vacations or saving for a significant purchase, parents can help children grasp the process and reasoning behind managing money,” she explained. “Additionally, parents can introduce basic financial concepts to their children by encouraging them to manage their allowance wisely and set savings goals, like saving up for a toy. They can also make learning fun by involving children in activities like comparing prices of products at the supermarket.” For older children, she added, digital apps are available that teach more advanced concepts, including family budgeting, digital spending, borrowing, taxes, the role of money in the economy, and the benefits of investing.

“It’s important to remember that financial education is a continuous process,” Karkoti warned. “As market conditions constantly evolve, and new, complex products and risks emerge, it’s necessary to keep updating and expanding our knowledge. For example, the areas of electronic transactions, the internet, and social media require careful attention, as the public isn’t always able to identify reliable information sources, which can lead to investment decisions based on misinformation or even deliberate deception.”

Public financial education has long been a key strategic priority for CySEC, which undertakes significant initiatives throughout the year aimed at educating the public, regardless of age. Among other efforts, CySEC manages an online Financial Education Portal on its official website, regularly updating it with educational materials that are easy for the average citizen to understand, including investment guides, articles, interviews, practical advice, warnings, and manuals.

“We also actively engage in international campaigns to raise awareness about the importance of financial literacy, such as Global Money Week organised every March by the OECD, and World Investor Week held every October by the International Organization of Securities Commissions,” said Karkoti. “Additionally, we conduct our own campaigns to raise awareness and educate the public on current issues that we believe investors need to know about. In all our campaigns and initiatives, we work to maximise media outreach to raise awareness across the population. At the same time, we fully utilise social media to better promote and spread our messages, reaching young people and those who prefer to get their information online.”