Five out of 10 Colombians do not like their financial situation

Financial education is a term that has gained relevance in recent years, driven mainly by the players in this market, who seek to help people learn how to use their money and become familiar with terms such as savings, investments and smart use of money. Despite the progress that has been achieved thanks to this, There are still many citizens who are not satisfied.

A recent report from the financial sector revealed that despite the advances in financing provided by banking institutions and fintech, 54% of Colombians are not satisfied with their current financial situation. The biggest dissatisfaction, according to these experts, lies in the need for effective solutions to improve the economic well-being of citizens.

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According to figures presented by the Regulatory Projection and Financial Regulation Studies Unit – URF, 85% of people do not track their expenses with any physical or digital tool and 57% could not assume a financial shock equivalent to a monthly income, without resorting to credit or support from their relatives.

Clara Escobar, executive director of the Association of Financing Companies – AFIChighlights that one of the areas for improvement is open finance, which emerges as a tool that plays an important role in transforming the local financial landscape and offering greater financial stability to people.

“Open finance facilitates access to credit by allowing a more precise assessment of the applicant’s financial profile. Experience in other countries shows that this methodology has allowed credit lines to be extended by 30% for known users, reflecting greater confidence in the system and a better assessment of risk,” he explained.

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For Escobar, in addition, 65% of clients become credit subjects, which facilitates access to financing and also reduces defaults and arrears by 25%. In this way, in his opinion, the financial system becomes a more affordable world for people, also helping to include citizens in this sector.

“Open finance promotes the placement of credit through the use of personal information available in different public and private actors, facilitating the inclusion of underserved populations. By allowing the development of financial products and services tailored to the specific needs of people, we are not only expanding access to credit, but also fostering the country’s economic growth and stability,” said Clara Escobar, executive director of Afic.

Financial education

In addition to promoting inclusion, this report highlights the need to invest in it to another front, in order to help people to know and take ownership of the benefits that can be given to citizens, as well as the risks that exist in the industry. It is about financial education, which for them is hanging.

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This is clear when reading that 78.4% of Colombians continue to use cash as their preferred payment method, especially among the population with incomes of 3 SMLV or less, which highlights a gap in the adoption of financial products, driven mainly by a lack of knowledge of the tools and services that exist.

“As more people understand the benefits of using financial products, they will have easier access to solutions that promote economic well-being. Examples of these solutions include account aggregation, personal finance managers and product comparison,” Escobar said.

Current challenges

Afic experts concluded by showing how open data and the Immediate Payment System (SPI) are transforming the financial ecosystem, generating greater dynamism in the sector. In this sense, they emphasized that the implementation of these methodologies must be accompanied by public and business policies that reinforce information security.

“All of this helps to ensure the protection of user data. and generate the trust required for consumers to agree to share their information, an essential basis for the functioning of this model,” concluded Clara Escobar.

Finally, they agreed that the system faces challenges such as reduced margins, limits on lending rates, a decrease in the credit portfolio, and an increase in delinquency in certain portfolios. In addition, they mentioned that it is crucial to address capital, liquidity and profitability management to face traditional risks and to develop everything related to emerging risks, such as climate change and social and geopolitical tensions.