Immigrant backgrounded young people as target group for financial literacy work by financial institutions in Finland : Challenges and opportunities

Abstract

This thesis focuses on financial literacy of the target group of immigrant backgrounded young people and the financial literacy work executed by financial institutions from their perspective. Financial literacy is a concept which describes how well an individual can manage their own financial life and achieve financial well-being. The integration to society of immigrant backgrounded young people can be considered as a question of equality. The share of immigrant backgrounded young people has increased in Finland. It is thus justified to analyse the financial literacy level of the target group and possible differences to other population groups. In addition, it is justified to analyse the financial literacy work conducted by financial institutions from the point of view of the target group by analysing the identified challenges and opportunities regarding financial literacy work.

The theoretical chapter focuses on the concept of financial literacy, its sub-parts, measurement and significance. The supplementary theory attachment chapter focuses on sustainability as a concept, ESG framework and financial literacy work of financial institutions in this context. The empirical part of the thesis is multi-method approached. It first analyses internationally the level of financial literacy of immigrant backgrounded young people through a literature review. This is carried out by reviewing research focusing on the international and Finnish context, which have a link to immigrant background, young people and financial literacy or its sub-parts. The empirical part then analyses existing challenges and possibilities in financial literacy work conducted by financial institutions from the point of view of the target group. This is executed by conducting semi-structured expert interviews, where the participants have a link to financial literacy themes through their occupations and roles in the financial sector.

Based on the literature review of prior research, there exist differences in financial literacy performance between immigrant backgrounded young people and non-immigrant backgrounded young people, both internationally and in Finland. Immigrant background however does not seem to explain solely the financial literacy outcomes but is likely connected to other potentially influencing factors such as socioeconomic background and language skills. This is in line with the findings of the expert interviews, which also found language skills and socioeconomical aspects to be possible roots for the challenges in financial literacy for immigrant backgrounded young people. Additionally, the heterogeneity of the target group was found to be a reason to avoid generalisations, which emphasises the need for case-by-case financial literacy work. From the perspective of the target group, the opportunities regarding financial literacy work were for example developing better customer base understanding, employer brand strengthening, product offering developing, improving the integration process to Finland, sound customer base and reduced credit risk. Finally, cooperation between financial institutions and third sector organisations was found to help the experts to reach the correct audience at a suitable place. Practical tools for financial literacy work development are for example plain language usage and increasing competences and situational awareness of the professionals in the practical financial literacy work and in the customer surfaces.