This is a guest blog post from our partner Peterevans
We are currently witnessing a massive change in the way we approach financial literacy. Historically, handling money was seen as the domain of banks and financial services firms, before the 2008/09 financial crisis radically changed the mainstream population’s perception. Last year, polls showed that two-thirds of banking customers no longer trust their lender to look after their money. Self-directed investing, where retail investors make their own financial decisions, has steadily increased in popularity as a result.
As another consequence of the lack of trust in the banking sector, promoting financial education has been high up on the political agenda in the UK in recent years. This political push, which is also driven by rising levels of household debt, led to government initiatives such as the creation of the Money Advice Service in April 2011, to provide free advice for people and help them make the right financial decisions. In addition, financial education will be part of the compulsory nationalcurriculum for schools in England from September 2014.
So things have changed and are about to change even more. In the meantime however we are facing a situation where many retail investors still struggle to understand the full impact of their decisions when investing money – both in terms of opportunities as well as dangers. Concepts such as stakeholder pensions and ISAs do not get enough publicity from the government, so that many do not fully understand their importance and potential. And even though managing ISAs and trading equities has been made very easy through modern technology, many investors feel insecure and overstrained with making the right decisions and maximizing returns.
To address this, Stephen Pinner of City consultancy Goodacre, approached us to work with him to develop a fun and educational concept, which captures people’s imagination. The result is the SharesCool site, an online trading game which mirrors exactly what goes on in the “real” stock market. Players are given a fictional £100,000 which they can use to virtually buy and sell shares. This makes it very easy for them to learn how to trade and how to research their own investments.
The platform uses the same Microsoft servers that power processing of real trades. We have tested SharesCool with students as well as people in the City, with very positive results. The next step in the project is now to have the service endorsed by city institutions. Currently a broad roll-out is planned for about mid-October.
I believe that in recent years modern technology has had a vast positive impact on the way we conduct business, and the way we handle money. Technology is now key in everything we do in our lives, and helps us to be more connected, flexible and independent. Having worked in the financial services industry for decades and seeing how the industry has evolved, we are now getting one step closer to helping people becoming more confident and financially literate, by utilizing existing technology in a creative and stimulating way.