Research and Teaching Agenda
The following describes some of the key proposals emerging from the white paper that are critical for the implementation of the Framework but that require further research.
Build on existing research to create a nation-wide framework for defining and operationalising all relevant dimensions of financial wellbeing. Engage with relevant stakeholders (e.g. government, industry, consumer advocates) to ensure the framework is adopted on a national basis. Investigate the determinants of the various dimensions of financial wellbeing. Conduct research to determine clear pathways to improving financial wellbeing.
Responsibilities in financial decisions and contracts
Develop a rigorous framework to guide the allocation of responsibilities in financial decisions and contracts. This will involve determining the cognitive and other capabilities of individuals on the one hand, and the capabilities required to make good decisions on the other. Develop a legal mechanism to assess the responsibilities of contractual parties and their fairness.
Fairness of financial contracts and fitness for purpose
Define and operationalise fairness in relation to financial contracts, both at the individual and institutional level. Design a framework to enable individuals to assess the contractual terms and their fitness for purpose by reference to financial wellbeing and on the basis of key terms summaries.
Complexity of decisions and rules
Develop a framework to measure complexity of financial decisions and rules. Based on this framework, determine the cognitive and other capacities required by decision-makers to make those decisions and to follow those rules. The ability to quantify the cognitive and other resource requirements in respect of decisions and rules is essential for the allocation of responsibilities in contracts and a determination of fairness.
Financial capabilities development
Develop effective interventions to build individual financial capabilities. These interventions should be designed based on the Framework, using evidence-based methods. Capabilities development should include teaching as well as the use of technology in areas such as AI-assisted decision-making tools.
Engaging people with their finances
Investigate how Australians are currently engaging (or not engaging) with their finances. Determine how to better engage Australians with their finances to improve their financial wellbeing. Develop programmes and technology to improve Australians’ engagement with their finances.
Bridging the gap between knowledge and action
Investigate where financial behaviours diverge from financial knowledge, i.e. when, how and why do people make suboptimal financial decisions despite financial literacy. Determine how technology or other tools could be used to bridge this gap and support (with consent and without compulsion) individual decision-making.
Accounting for inequality
Leverage existing research and engage with relevant research and community partners to address inequities that are exacerbated as a result of the financial sector, e.g. the gender superannuation gap.
Investigate how technology can be used to communicate information about – and provide advice on – financial products and services more effectively and how individuals can use technology to tailor disclosure to their specific circumstances and better support their financial decision-making.
Develop AI-based tools to support financial decision-making. Test those tools using evidence-based methods and the Framework.
Ethics and data/AI
Establish and support of research into digital ethics. Promote research into both explainable AI and methods for evaluating bias and fairness in algorithms. Define appropriate consent models that can be effectively deployed without overwhelming the public. Develop better models of privacy that recognise the inherent risk of collecting and analysing longitudinal data.
Redesign the regulatory framework with financial wellbeing as the core objective
Investigate how a principles-based, outcomes-focused approach can be adopted with financial wellbeing as the core objective to revamp the regulatory framework for financial products and services. Develop rigorous protocols and processes for roadtesting and updating the regulatory framework. Integrate, and achieve an appropriate balance between, technology and human involvement and the relevant standards that should be expected of each to maintain and enhance trust in the system.
Incorporate topics such as financial literacy, financial wellbeing and financial technology (FinTech) into the teaching curricula at the relevant levels of education
Explore how – and at which level – financial literacy, financial wellbeing and financial technology can be incorporated into the teaching curricula. Design and deliver courses for these topics at the relevant level (e.g. FinTech courses at the university level).