CORE: Young People Need Long-Term Financial Literacy

Jakarta (ANTARA) - The Executive Director of the Center of Reform on Economics (CORE) Indonesia, Mohammad Faisal, stated that the digital technology skills of young people must be accompanied by digital financial literacy that emphasises long-term aspects. Faisal observed that Generation Z and Generation Alpha possess advantages in digital technology, including in the financial sector. However, behind this high digital literacy, these generations still face challenges in managing finances due to consumption patterns that tend to prioritise secondary and tertiary needs. “I see that priorities in consumption often differ, or rather they often focus on secondary, tertiary things compared to primary ones, except for food,” he told ANTARA in Jakarta on Friday. He assessed that the ease of access to technology and digital financial services has not been fully matched by the ability to determine long-term financial priorities. The differing consumption patterns among young people are often influenced by social media, which encourages them to be more consumptive in pursuit of recognition or to be seen as more relevant in the virtual world. According to him, young people’s awareness of managing finances still needs to be improved, and they must start thinking about long-term consumption priorities such as home ownership. Furthermore, he stressed that the ability to arrange spending priorities and plan finances from an early age is an important provision for creating financial resilience in the future. Faisal suggested that banks encourage the use of digital financial services not only to facilitate consumption but also for more productive activities. “The use of digital financial services needs to be promoted for the younger generation, but not just for financial management; it should also extend to production activities so they can become entrepreneurs and build businesses,” Faisal said. He added that with better financial literacy, digitalisation in the financial sector can drive productivity among the younger generation while simultaneously contributing to national economic growth.