The social responsibility of financial institutions and the Hungarian Post regarding the financial culture. Készítette: Cserepes Liána

Budapesti Gazdasági Főiskola Külkereskedelmi Főiskolai Kar Gazdaságdiplomácia és Nemzetközi Menedzsment Szak Nappali tagozat Angol szakfordító és tolmács szakirány

The social responsibility of financial institutions and the Hungarian Post regarding the financial culture

Készítette: Cserepes Liána

Budapest, 2009

[The social responsibility of financial institutions and the Hungarian Post regarding the financial culture]

Ta b l e o f c o n t e n t s Introduction

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I. Chapter I.1. The Corporate Social Responsibility and what comes to everybody’s mind about it I.2. Back to the beginnings of corporate social responsibility

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I.3. Brief outline of the corporate social responsibility’s current state in Hungary I.4. Corporate Social Responsibility of financial institutions

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II. Chapter II.1. The current economic environment

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II.1.1. The first phase: The financial crisis

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II.1.2. The second phase: The economic crisis

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II.2. The financial crisis effect on the Hungarian financial market

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II.3. Consumer habits in the current financial environment reflecting the quality of the Hungarian financial culture

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III. Chapter III.1. The financial culture in Hungary

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III.2. Financial illiteracy in Hungary and the possible solutions according to the education’s, the financial sphere’s and the state’s angel

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III.2.1. The education’s aspect regarding to the

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Hungarian population’s financial literacy III.2.2. The financial institutions’ aspect; financial culture’s development and consumer’s confidence

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III.2.3. One bad apple which has stirred up the still water

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III.2.4. The Hungarian government’s role regarding to financial culture

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Conclusion

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Appendix

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Introduction “I don’t think this is only about a few bad apples… This is the worst crisis of confidence in the business.” -Charles Lewis, Centre for Public IntegrityThe Corporation

Financial literacy impacts financial decision making. And it is all impacted by consumers confidence in financial suppliers. The negative combination of the previous three can be blamed for failure to plan for retirement, for the lack of insurance and saving, for continuous consumption from credit without adequate financial cover… for the existence of the Antiprovident Group, for the Association of Aggrieved Parties of Bank Loans, for the eight thousand complaints arrived to the Hungarian Financial Supervisory Authority just in 2008, concerning financial institutions’ activity. The line can be continued. But who is to be blamed? The state, because it does not provide adequate legal background which prohibits the operation of irresponsibly granting financial institutions? Or the education system, because it is still not aware of the proper importance of financial education, which does not use correctly the assets provided by the state and international organizations? There had been made various surveys by the commission of various governmental institutions and various participants of the competition sphere which showed that the Hungarian population is financially illiterate and what makes everything worse that it is lack of confidence. What does it mean? Who does average Hungarian consumers turn to ask for advice? Concerning financial institutions they are beginning to recognize their benefit of the population’s financial culture development. But why is it important for financial institutions to invest money and time in consumer education? Do it worth for them? And if it do, is there a limit of knowledge what they can share with consumers without causing themselves financial loss? The financial education’s question is a very complex issue, cannot be said that is only the state’s, the education’s or the financial sector’s responsibility; every participant has to do its best to render the situation better. Nowdays, I think, when the corporate social responsibility is very important, the financial culture’s development by financial institutions can be considered as basic exercise as the contaminant emission lowering or the tree planting of the secondary sector.

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In my thesis, I’m searching the response for the following questions; how important is confidence in clients’ decision making? I would like to drive the attention to the importance of financial culture development, to the responsible financial service supply and to the development of consumer confidence, because a more responsible and a more reliable financial sector will be able to find the way out from the financial crisis.

Cserepes Liàna Author

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I. Chapter I.1. The Corporate Social Responsibility and what comes to everybody’s mind about it

Corporate social responsibility is on every worthwhile PR personnel’s mouth nowdays. In the competition sphere corporations and companies with huge turnover are expected to do something for the society and do not concentrate only on their own enrichment. Because of its nature, it is easy to blame corporate social responsibility (or let’s use the most common abbreviation and call it simply CSR); companies which do not apply it can be blamed, but those which are donating skyrocketing sums of money cannot avoid critics either. The question has always been the same; why is it worth for companies to spend shareholders money, millions of Dollars, Euros or billions of Forints to protect the nature, to support child cancer researches, to donate food or clothes, to collect garbage, to send employees participate in foot-races to donate money for medical researches when many of them inevitably by their activities sorely pollute the environment, for raw materials fell thousand hectares of rain forests, employs children for physical work in developing countries or simply make employees work for a plate of rice per day and sell the good for a ten times higher price? Many CEOs have never ever been on most of their plants and sleep absolutely well at night because their company has CSR programs, so there is nothing citizens can complain about. Yes, that is the reason why CSR transformed into an ambiguous thing what everybody observes with a little irony. Obviously, the successful documentary films of Michael Moor and his counterparts have contributed to this process. I do not blame them, because in our world only shocking stories can attire a little attention to frightening and very dangerous phenomena. It seems that these films have hit their target, but contemporarily gave an awkward feeling that CSR has been used to cover companies’ “sins” with a few millions of Dollars, Euros, and Forint or whatever.

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I.2. Back to the beginnings of corporate social responsibility The definition of corporate social responsibility has been defined in many different ways. The World Business Council for Sustainable Development in its publication "Making Good Business Sense" by Lord Holme and Richard Watts used the following definition: "Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large”.1 We know what does corporate social responsibility mean today, but there is still need to know about the beginnings. Even though it is a popular issue and huge amount of information is disposable about it in various libraries and on the Internet, the expression is not clear. Ones instance enormous insurance companies which in the seventies have already had corporate social responsibility departments, according to others the movement derives from huge scandals of American companies or from the Watergate-case. According to reliable scientific sources the starting point of the CSR was the book of Howard Bowen in 1953 which title was the “Social Responsibilities of the Businessman”. Gergely Tóth, the author of “The really responsible corporation” agrees with those analysts who bring up as an example for “social enlightenment” entrepreneurs who in the nineteenth, twentieth century built houses, kindergartens for their employees, assumed whole-life employment or became god-father of the children of their workers. All of the previously mentioned contributed to a familiar, caterer atmosphere in which small enterprises have transformed to huge multinational corporations.2 The necessity of CSR has always been a controversial issue which derives from its nature. Milton Friedman famous economist has declared that “the sole business of the

1

Lord Holme and Richard Watts: Making good business sense, publication in the World Business Council for

Sustainable Development, http://www.mallenbaker.net/csr/definition.php, 02.02.2009, 10:38 2

Tóth Gergely, 2007: A valóban felelős vállalat, A fenntarthatatlan fejlődésről, a vállalatok társadalmi

felelősségének eszközeiről (CSR) és a mélyebb stratégiai megközelítésről, http://www.kovet.hu/view/main/60940.html, 02.02.2009, 11:04

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managers of a publicly held corporation was to maximize the value of its outstanding shares”.3 In his article published by the New York Times magazine he compared CSR activity of companies to socialism. He went even further suggesting that businessman who is promoting desirable social ends like protects full-employment, protests against discrimination or animal researches, avoids pollution and donates investors money to hospitals and funds is an “unwitting puppet of the intellectual forces that have been undermining the basis of a free society”.4 Furthermore he added that in a free-enterprise, private-property system, a corporate executive is the employee of the owners of the business, he is an agent whose direct responsibility to his employers is to conduct the business in accordance with their desires, which generally is to make as much profit as possible. The businessman is allowed to be socially responsible in only one case; if the owners of the business want him to be so. As a principle he can do whatever he wants but as an agent he has to move according to the employers’ expectation. Many noted economists have fall into line with Milton Friedman on the score of CSR. For example Henry G. Manne the dean emeritus of the George Mason University School of Law in the Wall Street Journal expressed that according to his point of view “corporate social responsibility is a bunk”.5

According to Manne citizens want to get involved in the

management and in the decision making of the corporations because they do not like or appreciate the “capitalist success stories”6 and they try to control more private wealth. From their approach a corporation doesn’t have conscience and this characteristic justifies and dispenses from responsibility on the society and on the environment. Milton Friedman in the documentary film “The Corporation” of Mark Achbar, Jennifer Abbott and Joel Bakan told the following: “Can a building have moral opinions? Can a building have 3

Milton Friedman, 13 September, 1970: The Social Responsibility of Business is to Increase its Profits, The

New York Times Magazine, http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-respbusiness.html, 27.01.2009, 18:37 4

Milton Friedman, 13 September, 1970: The Social Responsibility of Business is to Increase its Profits, The

New York Times Magazine, http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-respbusiness.html, 27.01.2009, 18:37 5

Henry G. Manne, Friday, November 24, 2006 12:01 A.M. EST: Milton Friedman was right "Corporate social

responsibility" is bunk, http://www.opinionjournal.com/editorial/feature.html?id=110009295, 27.01.2009, 18:41 6

Henry G. Manne, Friday, November 24, 2006 12:01 A.M. EST: Milton Friedman was right "Corporate social

responsibility" is bunk, http://www.opinionjournal.com/editorial/feature.html?id=110009295, 27.01.2009, 18:41

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social responsibility? If a building can’t have social responsibility why do we say that a corporation can? A corporation is simply an artificial legal structure, but the people who are engaged with it whether they are stock holders, whether they are executives, whether they are employees they ALL HAVE MORAL RESPONSIBILITIES.”7 Personally I think that people’ moral rules shouldn’t change or disappear because they are got employed. Even if Milton Friedman is a respectful, Nobel-prized economist by the years there could be heard increasingly opposed opinions about his corporate social responsibility concept. “(…) we must ask two questions: Is it meaningful to apply moral concept to actors who are not persons but who are instead made up of persons? And even if meaningful, is it advisable to do so?”8 Kenneth E. Goodpaster and John B. Matthews, Jr. gave the following answer to the question; “If a group can act like a person in some ways, than we can expect it to behave like a person in other ways. (…) If we can say that persons act responsibly only if they gather information about the impact of their actions on others and use it in making decisions, we can reasonably do the same for organizations. Our proposed frame of reference for thinking about and implementing corporate responsibility aims at spelling out the process associated with the moral responsibility of individuals and projecting them to the level of the organization.”9 Thanks to scholars like Goodpaster and Matthews the necessity of CSR is not a question anymore. Every company has to act responsible, has to take into consideration the society in which its activity is carried out. The European Union (EU) pleads a definite aspect about corporate social responsibility: “Voluntary business initiatives, in the form of corporate social responsibility (CSR) practices, can play a key role in contributing to sustainable development while enhancing Europe’s innovative potential and competitiveness.”10 Furthermore the EU defined the CSR as a following: "A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with

7

Mark Achbar, Jennifer Abbott, Joel Bakan: The Corporation, 2006

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10

Working Together for Growth and Jobs: A new start for the Lisbon Strategy, European Commission COM

(2005) 24, February 2005, http://ec.europa.eu/enterprise/csr/index_en.htm, 27.02.2009, 15:14

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their stakeholders on a voluntary basis."11 All the above mentioned quotations represent that CSR has gained an important position in policymaking within the EU. While at the beginning of the 1990s attempts aimed only to solve unemployment and social exclusion (European Business Declaration against Social Exclusion) by structural reforms promoted by the President of the European Commission Jacques Delors (European Summit in Lisbon in March, 2000), in July 2001, the European Commission issued a Green Paper on a European framework for CSR. Its aim was to launch a wide debate among stakeholders and encouraged companies to take on board voluntarily social and environmental concerns alongside their economic ones. In October, 2002 the EU created a European multistakeholder forum on CSR (CSR EMS Forum) chaired by the Commission, to promote business contributions to social and environmental progress. Here trade unions, NGOs, investors, consumers and so forth could develop common understanding of CSR and could discuss related practices. In 2005 the EU created the “European MarketPlace and the Roadmap on CSR”. In response to the Roadmap, European Commission President Manual Barroso offered businesses a new partnership. In 2006 the European Commission renewed its policy on CSR through a communication to the European Parliament, the Council and the European Economic and Social Committee. The communication entitled "Implementing the partnership for growth and jobs: making Europe a pole of excellence on corporate social responsibility on CSR". One of its key elements was the European Alliance for CSR; a concept which drew up on the basis of contributions from business active in the promotion of CSR. The Alliance is an open for all type and size of European enterprises and it is a political umbrella too for new or existing CSR initiatives by large companies, SMEs and their stakeholders, with the aim to increase the uptake of CSR amongst European enterprises. In the following years the EU organized three high-level meetings in light of the European Alliance for CSR and it is still making steps toward a Europe which is more socially responsible.

11

The European Union’s definition for the CSR, http://ec.europa.eu/enterprise/csr/index_en.htm, 27.02.2009,

15:15

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I.3. Brief outline of the corporate social responsibility’s current state in Hungary From the United Nations first Regional CSR Project in January, 2007, called United Nations Development Programme (UNDP) many information is available concerning the CSR in Hungary. Within UNDP’s frame TÁRKI and the experts of Corvinus University of Budapest received an assignment to make a survey about the level of corporate social responsibility in Hungary. The researchers used the methodology developed by the Project’s international experts, Dr. Róbert Braun and Mark Line. They made interviews with sixty companies and non-governmental organizations than compiled and published the assignment which showed the following picture about the CSR in Hungary: “According to the survey CSR is a relatively new phenomenon in Hungary. After the cease of the socialism where corporations were catering with the budget’s money, mostly the newly transferred multinational companies practice actively CSR in Hungary. Consultant companies, civil and trade associations pay very important role to foster CSR activity together with more and more conscious costumers. They help the issue to remain continuously on the surface. The survey pointed out that CSR is not an integral part of Hungarian SMEs’ business strategy; they consider it much more a PR tool. The most common form of CSR within the Hungarian-based companies is the sponsorship. Companies opposed to their western counterparts consider CSR as an expensive activity which cuts back profit. Only a few companies have CSR strategy and the number is trace of those which qualifies its reports by maverick societies. Few non-governmental organizations lobby and co-operate with companies for a more responsible operation while the media is not concerned by the CSR either. The legal ambience doesn’t foster the spread of CSR. The survey made an important conclusion that in Hungary western-like CSR management, commonly accepted and mature norms hasn’t been formed yet. This is the reason why can CSR defined in many different ways by those who analyze the issue.”12

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Braun Róbert, Mark Line, 2007: Tanulmány a vállalatok társadalmi felelősségvállalásáról Magyarországon,

http://europeandcis.undp.org/home/cst/show/A0AED266-F203-1EE9-BF23CDADCAF7C4F4, 27.01.2009, 14:56

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The above painted picture is confirmed by a survey about the state of CSR activity of the financial sector’s participants made by Gfk Hungária Market Research Institution and Braun&Partners in October, 2006. According to the Institution’s president, Ákos Kozák and the CEO of Braun&Partners, Róbert Braun, “CSR has begun to rise to strategic level and within some years it will become a distinctive factor which secures leading market position, but temporarily it is confined to donation and sponsorship. He added that companies usually follow the principle of “moving from inside to outside” concerning the CSR, what means that they emphasize the internal communication, then they try to gain the permission of clients and other stakeholders in the further phase. The survey had the same conclusion as the previously mentioned. Only few CEOs refer to CSR as the deliberately integrated part of corporate strategy. Corporate decision makers follow the “we know it, but we do it coolly” tactic. This is the reason why is CSR in infant phase in Hungary, i.e. it begins to appear in the operation of companies. In Hungary there is still need to wait for the great breakthrough of CSR in the business sphere even if there are more and more CSR programs and initiatives, but these reflect or the CEO’s personal commitment or the foreign owner’s expectations.”13

I.4. Corporate Social Responsibility of financial institutions Financial institutions have invented their own CSR programs by the years. They differ from other industries’ and sectors’ high-turnover corporations, because the financial sector in general is not an industry which has high contaminant emission caused by its activity. Anyway, the obligatory principle for every actor in any sector contains the following; sustainability and social responsibility. So, naturally, financial institutions have to follow the same rules during their activity. Banks, insurance companies and any other institutions which provide financial services for others, briefly the financial sectors’ participants, are all required to measure and publish the impact of their activity on the economy, on the environment and on the

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Braun Róbert, 16 September, 2006: CSR a pénzügyben,

http://www.magellanpr.hu/index.php?inc=inc.hajonaplo.anyag.php&azon=354&title=%20%20CSR%20a%20p%C3%A9nz%C3%BCgyben, 27.01.2009, 13:21

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society. To safeguard their position in the market they have to identify the progresses and impacts derive from their activity in the context of the society where they flourish. There are both beneficiaries and aggrieved parties of the financial institutions’ activity. Occasionally the concerned parties do not feel what happens around them, but in many cases they seriously suffer from the social and economical effects of financial crises caused by non-prudent financial services (it is enough to think about now day’s phenomena), but financially supported projects may have harmful impacts on the society as well (let’s imagine a high contaminant emission company’s new plant realized by a huge loan which is surely beneficial for the bank, but for the local citizens it is absolutely not). So participants of the financial sector have to involve in their activities the protection of social and environmental values and render them conspicuous. I do not forget that “corporations are artificial, legal structures” without soul and conscience (even if those who work for them should have both of them) and that’s why I do not want to exaggerate and expect them to render the above mentioned values before profit. But I agree and in my thesis I stand for those points of view who think that the above described nature of corporations can not and must not be an excuse to make damages on the society, especially damages that are not reversal. They have to be aware of the responsibility they have, they have to see that profit and business have their limits; there is a point where money cannot do more and the only way to move forward is to be honest, humane and responsible. This is the biggest business challenge of the 21st century. Naturally financial institutions are not all bad apples evidently, but every financial service accorded whether it is a credit, mortgage loan, investment, insurance or pension plan can create conflicts and can have results which could not be foreseen or predicted before (like insolvency caused sudden dismissal, death, and so on). Furthermore, there is a principle which is especially important nowdays (and what I call their main responsibility); financial institutions must not support programs, projects and issues that reproduce poverty. Their responsibility and engagement for a higher-standard of living society has never ever been as important as in the era of the financial crisis. The financial sector above mentioned mission is exactly as delicate as the contaminant emission lowering for the heavy industry. Financial suppliers in addition to the previously mentioned (lets call them “originalkind” social responsibilities) have a very special and especially important social responsibility which corporations operating in other sectors do not have; financial institutions have to 13


provide products and services which do not harm clients financial conditions, they have to provide adequate and right information about their products and services, they mustn’t play on clients contingent financial incapability (those who have to withdraw a loan are not necessarily economists or financial experts) and as a corporate social responsibility project they should make steps to develop citizens financial literacy. The diminution of financial illiteracy contributes to the banking sector’s recovery too. With more knowledge clients would understand the utility of certain financial products or services. Accordingly consumers would have more confidence in the financial sector’s participants by understanding the conditions of the resorted services or products. I think very similar effects can be expected by favoring financial education what have been experienced when the IT and telecommunication sector began to foster the knowledge of computer and Internet-usage; more people get use to PCs and the Internet, more they will feel that they can not exist without them. The money invested to develop citizens IT knowledge return absolutely and generate additional demand. The Median’s survey’s data, collected in December, 2006 about the Hungarian population’s computer equipment shows that comparing it the World Internet Project’s survey made in 2002 computer possession is increasing in Hungary, because in 2002 only one forth of the households have been in the possession of computer, but to 2006 this number increased to more than 40%. This result can be surely thanked to the strong support from the government and the competition sphere, to Sulinet program, to E-Magyarország, and so forth.

I think, IT

knowledge is not more complex than financial knowledge, moreover to provide adequate knowledge there is need to begin both of them in early childhood, there is need for many practice and continues information about the novelties, so my point of view is that the boost of the demand and knowledge in the Hungarian IT sector can be a good example to show those who are skeptic about the financial sector’s obligation for the development of the financial culture. In March, 2006 the European Commission explained its point of view about corporations’ social and environmental responsibility. Beside the responsible behavior of corporations the European Union and the Euro Skeptics considers equally important the education of consumers who resort services and buy products. Screening it to Hungary, Dr. Péter Schiffer, the Hungarian Financial Supervisory Authority’s (PSZÁF) deputy directorgeneral explained in a document what was speaking about suppliers’ social responsibility that 14


there is need to educate consumers, to make them prepared to new circumstances of their life and support an equilibrate situation where the responsibility of suppliers and those who resort their services is seriously settled down. “According to the previously mentioned document of Dr. Schiffer, for many years in the past, financial suppliers have been controlled weather they have been keeping prudential regulations and processes and followed the rules of the law. Neither supervisory, nor other kind of authority or civil forum has ever interested in the impacts caused by the supplier and its financial services on the society or the society’s certain segments. At the same time to understand what supplier sells and what does consumer buy is one of the most important element of the developed financial culture. It follows that even financial suppliers’ services have to be clear, transparent and comprehensible“.14 Comprehensibility and transparency should be the basic elements of financial institutions business policy. To achieve this, financial suppliers have to provide enough information and in most of the cases they have to give adequate and very detailed explanation to consumers about basic financial terms and their rule in practice. It should not be considered as a generous action; most of the clients are not financial experts, so correct, precise and detailed explanation of provided services have to be required and concerning the current financial and confidential crisis it have to be taken-from-granted. According to this, I think the social responsibility of financial institutions should be the development of consumers’ financial literacy. It is very important because by supporting consumers financial knowledge financial sector’s participants will be able to restore consumers’ confidence and boost the sector’s profitability too. Regarding services provided to clients, financial suppliers have responsibility on their hands; they are not only accountable by the owners of the business or by supervisory authorities, but by the society as well. In case of every each financial decision, financial suppliers have to take into consideration clients’ claim and their financial limits. Financial institutions have to keep these basic rules, because only one wrong decision can destroy consumers’ trust. There is always a fundamental rule what financial suppliers have to keep on their minds; clients’ confidence is the root of the confidence in the financial

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Dr. Schiffer Péter, 22-23 May, 2007: A szolgáltatók társadalmi felelőssége

http://www.pszaf.hu/data/cms1562192/pszafhu_lpkonfanyag_schifferp.pdf, 14.04.2009, 11:07

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system and this confidence appears in the social and economical stability of a country. Due to these, financial suppliers have to do everything possible to eliminate factors what can cause mistrust, what can destroy their good reputation and clients’ confidence and consequently what can harm seriously the financial, economical and social stability of the country. Accordingly the previously mentioned, it is worth for the financial sector to figure out what are these factors that can harm the financial, economical and social stability and there is need to make the necessary steps to eliminate them (especially to find the way out from the current financial crisis). “The first most important responsibility of financial suppliers is to assure the informational symmetry. In case of deficient or not comprehensible information clients maybe acquire and resort services which are not adequate and probably harmful for them. The informational symmetry assures the balance of confidence what means that suppliers from their point of view provide services only if they are able to manage the possible risks with adequate assets, assuring their stability and business decisions. Suppliers have specialized apparatus and certain supervisory authorities controlling whether they are keeping the rules of prudent financial activities. On the contrary consumers stand alone on the market and even if there are ones who are much more informed, they usually resort the services as laymen. Generally the resort of services of financial suppliers is the existential interest of consumers; they have no alternative choice, but to buy these services, because of certain situations which they have to face with in their life; first of all they have to have a bank account for their salary and they have to have a credit card to have access to their money. Then they usually have to buy a house, a car or a washing machine, but they do not have enough capital, so they have to have a loan. When they are able to acquire the required goods they have to insure the possessing goods and so forth. They do not have any alternative solution, but to acquire the services offered by financial institutions, because they are necessary for their every day life. It is very important to emphasize that information stream is not enough alone. Financial suppliers can provide as much information as possible, but if clients are not in the possession of (at least) a basic financial knowledge they will not be able to understand the conditions of the resorted services and it can give chance for misunderstand which can lead to financial loss and lack of confidence. So, that is the reason why should suppliers invest money and time to develop financial literacy of citizens beside the continuous qualification of their personnel whereby the informational asymmetry can be decreased, financial culture (in 16


general) can be developed and financial products provided by financial institutions can infiltrate in citizens’ everyday life. The European Commission’s Green Paper highlights too, that consumers will be able to make more appropriate decisions if they have more sophisticated financial knowledge. When we are speak about “consumer formation” regarding their financial knowledge there is need to divide them into categories. The first group of consumers’ is that part of the population which already appears as consumers on the market, because they are disposed with income. They are usually lack of adequate financial knowledge and they have been already adults when they got to know financial suppliers’ products sometimes expecting miracle by using them whether these were investments or credits. While the other category incorporates students whatever type of school they frequent. They are those who really can handle new technologies (and most of the financial products are in line with some kind of new technology), exactly because of this there is need to foster a strategic point of view which centers in young people’s education the financial-economical cognition till the diploma. This would be a significant step fostering consumers’ responsibility and conscious. Within this frame consumers have to understand how do financial products work, moreover they have to come to know the risks, the advantages and disadvantages that can result by resorting certain cash-substitute products, credit build-ups, investments or insurance products. Even if there can be seen a little progress regarding the previously mentioned, transformation is very slow especially taking into consideration the rapid improvement of services sophistication there is the risk that the gap can not be eliminated. Agents have to pay serious attention whether clients understand the conditions of financial products and services resorted. There are certain segments of products that can be sold only to professional and well qualified clients; the MiFID which is the EU’s directive contains regulations for this. There are many unlucky cases of non-adequate sale of financial products and Dr. Péter Schiffer gives an example too: once an agent convinced a depositor who had his terminating deposit in foreign currency to put his money into a closed-end foreign currency found which is very similar to a deposit, but pays better. When the client asked whether he can have access to his money all the time he wants to, the answer was yes, of course. A little bit later the client decided to take out the money from the found, but from closed-end founds it is very difficult and expensive. Either the agent, neither the client knew it, moreover the supplier’s informational package for its clients hasn’t been clear regarding to it. 17


Exactly for this financial institutions mustn’t base their business policy on charming, simple but incorrect informational packages which only allure clients and do not provide information about potential risks. Suppliers know the best that consumers do not read the micro-sized letters on the bottom of the television’s screen at the end of the advertisements (because they do not have enough time for it either). And this is only one example when suppliers emphasize in case of later arguments that the offer is not similar to the contract. And that is exactly what consumer protection authorities call the blindfold of consumers. To avoid situations as the above mentioned there is need to qualify adequately agents of financial suppliers. Suppliers’ social responsibility can be handled on the merits if those who play key role in their provided services - namely the sellers - know what and why have to they do, what do they sell, to who they sell it and why. The service provider institutions’ agents are usually disposed with only maturity exam; understandably they do not employ collage and university alumni or bankers for the customer service en masse, because these kind of employees have to receive relatively high salary which would charge significantly financial institutions expenses. It follows that professional knowledge of agents who sell mass products formulates during their working experience, but in the worst cases they can not come by it either by practice. There are only certain service branches where some kind of professional qualification is obligatory whether it is the corporation’s own course or other kind of graduation that agents have to dispose with before they begin to work for a financial supplier. However it does not regard to every creditor institution and exactly because of this the problem is serious within the sectors’ financial products sellers group. According to my personal experience one of my acquaintance, who is unit leader of the Generali Insurance Company is searching continuously personnel in her group through iWiW. According to her advertisement she is searching for young and dynamic people who at least have maturity exam. These kinds of agents are usually lack of complex financial knowledge, so they can handle correctly only basic and not complicated issues, like diversification of deposit built-ups, differences between currency and foreign currency and so on, but in case of more complex and complicate issues their unconscious can be experienced absolutely. This is the reason why those clients who want to have house credits do not receive correct instructions concerning credit conditions. This is the reason why they can not obtain subsidies, their 18


request can be refuted while in the possession of correct and precise professional knowledge agents would be able to give suitable instructions to clients. So if agents would be able to explain better the conditions of the requested services, clients would be able to realize when a service or a product is not adequate for them.

In the possession of adequate

information clients can chose other kind of service and do not chase illusions. Or consumers can simply and perfectly fulfill the internal and external roles concerning the resorted service or product and they can profit the beneficial effects of the financial service or product. However according to the current reality (which is not only a Hungarian characteristic) to become banking administrator of a financial institution nobody is obligated to have university and collage diploma or any graduation after maturity exam. On the other hand this is the segment of service providers which have the most extended relationship with the society. Financial institutions are the suppliers which can influence the most population’s opinion about the financial sector’s operation and trustworthiness; according to citizens’ confidence financial supplier’s reputation and reliability can increase and decrease significantly. So, concerning the development of financial culture (which necessity in Hungary is not questionable anymore), service providers’ awareness have to come to the front with citizens’ education and formation as well, because it can influence and guide the direction of financial culture’s development either negatively and neither positively.”15 A layman can ask the question; why should a financial institution recline energy into the financial education of citizens. It wouldn’t be the task of the state through specialized educational institutions? Of course it is or it is better to say that it should be. In a perfect world. Where everyone is in the possession of excellent mental qualities. Where students are not surfeit. Where there is always more and more additional money to invest in the quality of education. Naturally the world is not perfect and children have different abilities. However the schools’ role in the financial education can’t be swept so easily from the table justifying it with lack of money and abilities. Personally I think the educational system and the financial institutions should divide the instructive activity and both of them have to take responsible and accurate part in it. In the following part of my thesis I will present my experience

15



19


regarding the education. My personal opinion in advance that there are good initiatives from the state and especially from the Hungarian National Bank, schools should make the best of them, they should make much more effort that they have done before to develop the students financial knowledge, but what is more important, to attract their attention to the risks and the traps. Consumers find themselves in a more dependent situation when they become debtors, namely when they borrow money from a financial institution. That’s why financial suppliers have to insert in their social responsibility policy the principle of responsible credit granting. I think, in current conditions this is one of the most important responsibilities of financial institutions, because it can help to restructure consumers’ confidence; this is the only way to assure the financial, economical and social stability. When financial institutions are granting responsibly, they provide credits after precise creditworthy examination. Thanks to accurate collection of financial sources deposits are in safe hands, so when depositors need their money invested, they can receive it. Responsible credit granting renders financial suppliers accountable not only to financial service providers, but especially to those clients who become their debtors. Unfortunately financial institutions easily forget about this kind of responsibility in the harsh competition; they allure clients with more and more advantageous offers which usually mean facilitation of borrowing conditions. However this kind of lending does not contribute to a correct business policy, to a business policy which assures long existence without huge loss and client panic. Financial institutions have to be profitable even in the long-run otherwise they will not be able to assure the interest rate they have promised to depositors and neither they will be able to provide profit to shareholders. Exactly for this reason creditors responsibility mustn’t finish with granting and by putting their hands on the possessions made for cover. On the other hand there are many examples for irresponsible consumer attitude too; unfortunately there are more and more people who forget the wise saw “make buckle and tongue meets” and they take on financial engagements that they can not accomplish. There is no regulation which can prohibit stupidity, but with an aware and socially responsible business policy granting to these kinds of clients is avoidable. As we can not say that after selling a product its impact on the society does not matter for the seller, in case of a financial service or product the provider’s responsibility is even more serious, because it can cause indebtedness. Irresponsibly granted credits can become contingency regarding debtor’s existence, because bad credits and “credit crunch” bring 20


debtor to bankrupt slamming his/her family or his/her enterprise with its possessions, destroying everything what he/she and his/her family has collected during their life with hard work. A credit crunch can destroy lives, can leave people on the street without work, salary and consequently without house. At this point irresponsible granting becomes a social problem with all of its consequences. That is the reason why I say; responsible landing is a social responsibility of the financial sector which is as important, as the law contaminant emission of other sectors. “Watchful granting does not finish with the transfer of the sum to client’s bank account after appropriate creditworthy examination and the subscription of the contract by both parties accordance. Financial institutions have to remember that modifying significantly credit conditions compared to the initial state means that they are risking client’s solvency. Usually clients do not calculate with notable rise of expenses, not even if the contract incorporates that supplier can render more difficult credit conditions by rising interest rates or by changing the schedule of payback and so on. Financial suppliers can not expect from laymen clients to count with all the possible outcomes of expense increase and figure out precisely how much does it mean in cash. According to this the creditor institutions have to examine and follow with attention whether debtors’ obligations are achievable or not, and what kind of changes influence their solvency. Financial suppliers have to calculate clients’ solvency limits and they have to remain within this margin even if they have to increase expenses. As external conditions creditors can not leave out of consideration changes of income provision of clients, the conformation of unemployment, because these factors have direct impact on solvency. So suppliers have to prepare solutions that can resolve problems derive from the previously mentioned problems. Naturally financial institutions can not have enough cover and assets, they must not face alone with this difficulties; the only way to find the solution for responsible granting is the social cooperation with government and municipalities. “16 Regulators and lawmakers are accountable for responsible credit granting too, because they have to create adequate legislative background which helps financial suppliers’ right operation, protect the institution itself, clients and stakeholders too. The

16



21


legislative power has recognized its key role in the furtherance of the financial culture development, one of the very last examples for this approach is the enactment of the antiusury act. One example for financial supplier and even for client protection is the introduction of the BAR-list (Interbanking Debtor and Credit Informational System). It is adequate, because provides information about clients’ indebtedness. According to the Hungarian practice those people are listed on the black list of debtors who have been in delay more than 90 days to pay at least the half of the minimum salary level (which is HUF 71 500 currently). These kind of bad debtors are presented on the list till 5 years even if they have paid back the sum later. As the effect of their fault, financial institutions’ incline to lend these people is very low neither for a higher interest rate. To present how serious the situation is; the number of those who are present on the black list was more than 700.000 at the end of January, 2009, but all the registered faults exceed 1.000.000. So, financial institutions have to examine whether the potential client is presented on the BAR-list and they mustn’t grant additional credit to him or her, because he or she will not be able to pay back the credit and will go bankrupt. Unfortunately many financial suppliers have not born witness to responsible and accurate credit granting, by providing additional credits to clients having significant debt on their shoulders (this tendency has been fostered by purchasing easily acquirable, conditionfree credits and by installments). Because of the BAR-list credit provider are able to estimate clients indebtedness and they are able to avoid deteriorate clients’ solvency by granting additional credits. At the end I want to drive attention again to an additional social responsibility of the financial sector. It is not else, but the recovery of consumers’ faith in financial suppliers’ trustworthy. Maybe it seems naïve or a little bit dull in a world which lacks of trust. This can not be seen through demand, because people buy even if they do not trust and expect traps everywhere. Consumers are prepared for this when they acquire a product or a service whatever kind would it be. Most of the consumers believe that sellers are only concerned about the profit, so their cooperation and consumer-orientation have very certain limits; till consumers’ and the sellers’ interests are the same, there are no problems in their relationship. But when an alteration happens in consumers’ interest (maybe they want to change the product or ask for an other service which is more adequate for them or there can occur any problem with them as well) sellers would be less helpful to assist in the change of the service or good that clients have already resorted. Even if the alteration of clients’ interest creates 22


inconvenience for seller, to be helpful and service minded in difficulty can be regarded as the best example for clients and they are very probably buy from the seller even in the future. According to the above mentioned this is the best time for financial institutions to correct their mistakes (what everybody has, so the problem is not making a mistake, but to do not try at least to correct it), make approved by the population their professional knowledge and their client-oriented and service minded business policy. The financial sector as well behaved irresponsibly, in their many actions the solely profit oriented behavior could be experienced which has contributed to consumers distrust. The first one who will be able to rebuilt customers confidence will be able to sell more and they will be able to make more profit according to it. My experience concerning consumers’ opinion about financial institutions operation is that most of the consumers regard them if they were necessary bad; everybody expect at least a little loss, some kind of inconvenience, traps and clients usually ask their friends or a family member about his or her experience with the financial supplier in question before they sign a contract. It can not be always regarded as consciousness, because they are already afraid and accept the opinion and experience of laymen like them. However it is inevitable for everyone to get in contact with at least one financial institution during a lifetime, but there are many (and always much more) people who would prefer to put their money under the pillow then to put it into a bank deposit. The reason of mistrust can be the lack of information and knowledge on consumers’ side, because laymen can be abused more easily or they can more easily misinterpret something in the complex financial world and can feel themselves abused. To avoid the previously mentioned financial institutions mustn’t expect from clients outstanding financial knowledge, they have to provide them as many information as possible, explain them all the conditions and details and have to ask for feedbacks from them. Financial institutions mustn’t play on the lack of financial knowledge of clients as it has happened many times in the past (and unfortunately it is happening somewhere even today). Accurate, client and not profit oriented behavior can create consumer confidence and foster the demand for financial services. Especially in hard times like today consumers have to feel themselves safe, but what is more important, they have to feel safe their money which for many people is the saving of a whole life. In today’s hard times the financial sector should make much more effort to promote the development of financial knowledge of people, provide more information and by these 23


enhance the confidence of people for their services. Additional scandals can weaken the economy and cause much more harm to consumers. Financial institutions’ social responsibility regarding to the development of citizens’ financial culture has never ever been as important as it is now days; there are many analyst who speak about not financial, but confidential crisis, so the only way out from the dark is to give back to financial suppliers’ clients what they lost during the past decade: their faith in a financial sector who is not only concerned with its own benefit, but a financial sector which operates for its clients benefit. Financial institutions have to never forget; people entrust them with the “fruit” of their work, with the collection of a whole life’s hard work, if they do not maintain adequately they can derogate clients and their families present and future.

II. Chapter II.1. The current economic environment To understand why should the financial sector recognize the importance of a new business policy which is more accurate and more client oriented, which is based on the confidence of clients there is need to present the current economic environment in the world, the current economic tendencies, where do their roots derive and how do these phenomenon affect the Hungarian economy and financial sector. Here is a quotation from the latest Financial Stability Report of the National Bank of Hungary: “Increased distrust can be experienced on the international financial markets. Risk premiums and financing expenses are high, because of the deteriorating macro economical environment and the fragile international financial system. Financial institutions’ (banks, insurance companies, investment founds, etc.) deficits are still increasing regarding to the secondary mortgage market what leads them to restructure their balance, reduce their leverage, namely they have to call in additional capital otherwise they have to hold in credits. Their assets, the credit and economic cycle are strongly linked and foster each other. Jointly with banks credit reduction and with the decrease of home and financial assets the expenseshocks caused by high commodity prices contribute to the retardation of the economic growth. Because of the fragile international financial and prosperity environment together

24


with the unfavorable internal conditions (concerning the investment, workforce and credit market factors) the Hungarian economic growth will remain very low.”17

II.1.1. The first phase: The financial crisis In the United States according to the practice of late years, banks provided mortgage loans to individuals without accurately analyzing their creditworthy. The Federal Reserve System (Fed), namely the US “Central Bank” kept the interest rates low, creating “cheap money”, it has been easy to get mortgage loan. The financial sector arm-in-arm with the US government has never thought that debtors won’t be able to pay back loans; because last years equilibrate economic growth in the US reassured them. The current financial crisis had its origin in traditional factors that have led to past banking crises in the US and other countries; but also in non-traditional features that are idiosyncratic to this one. Among the conventional features there can be seen a boom period of large credit growth, a sustained rise in asset prices ─ especially in the housing markets ─ and explosive lending to non-creditworthy economic agents (in this case, sub-prime mortgage debtors). But there were also unconventional or novel features that contributed to the breadth and depth of the sub-prime crisis. For example: 1. The development of the originate-and-distribute model of transferring risk; 2. A high appetite for yield that nurtured a growing demand for high-risk assets; 3. Ex-ante ignorance and ex-post uncertainty on the risk features of mortgage-based securities, related derivatives and credit-default swaps; 4. Inadequate corporate governance and management incentives in financial institutions; 5. The role of regulators and rating agencies. The above mentioned factors contributed to the unfold of the financial crisis but it has even deeper roots deriving into the past. The roots of the credit crisis stretch back to another notable boom-and-bust: the tech bubble of the late 1990’s. When the stock market began a steep decline in 2000 and the United States slipped into recession the next year. In response the Federal Reserve sharply lowered interest rates to limit the economic damage. Lower

17

Magyar Nemzeti Bank, October, 2008: Jelentés a pénzügyi stabilitásról (Időközi felülvizsgálat), p.13

25


interest rates made mortgage payments cheaper, and demand for homes began to rise, sending prices up. The value of real estates have been increasing, so banks have built all their additional financial products on the presumption that this tendency is going to continue even in the future. This meant that the banks’ model has only been operable till the real estate values were increasing. If a debtor has become default, it was still beneficiary for the bank, because it could sell the real estate on a higher price than its “original” value. Contemporarily a credit-competition has begun between banks. Banks have been competing with each other granting more and more risky mortgage loans, giving money to more and more unreliable debtors, financing more and more hazardous investments; this was the only way to outdo the previous years’ turnover. In addition, millions of American homeowners took advantage of the rate drop to refinance their existing mortgages. As the industry ramped up, the quality of the mortgages went down. And turn sour they did, when home buyers had to leverage themselves to the hilt to make a purchase. Default and delinquency rates began to rise in 2006, but the pace of lending did not slow. Banks and other investors had devised a plethora of complex financial instruments to slice up and resell the mortgage-backed securities and to hedge against any risks — or so they thought. New, extremely hazardous products have been marketed by financial institutions to increase their profit as much as possible; CDOs (collateralized debt obligations), CDSs (credit default swaps) and RMBs (residential mortgage backed securities). Analysts considered products like the previously mentioned the main reason of the financial crises. The risk laid in the nature of these products. CDSs have been credit derivative contracts between two counterparties. The buyer made periodic payments to the seller, and in return received a payoff if an underlying financial instrument defaulted. CDSs have been sold in “packages” what made difficult to analyze the real risk of the product and created structures that couldn’t be seen through. The market of CDSs hasn’t been regulated, because the state’s regulations haven’t followed the changes of the market occurred, so concerning CDSs there hasn’t been any particular convention. On the contrary CDOs contained credits or bonds where the investor (the buyer) took over the risks of the “package”. This has been beneficial for the seller bank, because it has been able to place more credits. The commerce of the above mentioned products couldn’t be seen through and when the prices of the real estates began to decrease the labyrinthine system shattered and with it the globalized financial system shattered too. From 2006 the external conditions 26


began to deteriorate and the US economy slowed down too, so increasing credit crunch could be experienced, which influenced the real estate prices, because there has been more and more house to sell on the market. Real estate agencies began to go bankrupt, banks had granted mortgage loans followed them. This influenced the interbank market which has frozen, because banks regarding the high risk of insolvency were disposed to give credit to each other only for a very high interest rate. Because of the continuous news about banks which went bankrupt, banks confidence trembled, didn’t want to grant credit to each other, but to individuals neither.

And to top it all the money markets from all the process of the

international economy are the most globalized where the US plays the key role. That is the reason why didn’t stop the crisis on the American border and why is it extended to the other parts of the world. Different banks in different countries have business relationship with each other; bigger banks have created thousands of subsidiaries in many countries. For example in Hungary we can also buy financial products which performance depends on the US economy’s certain sectors’ output. So, it is clear why could the financial crises twist to Europe. The financial crisis’ avalanche what swept across the world after on began with the collapse in June 2007 of two hedge funds owned by Bear Stearns that had invested heavily in the subprime market. As the year went on, more banks found that securities they thought were safe were tainted with what came to be called toxic mortgages. At the same time, the rising number of foreclosures helped speed the fall of housing prices, and the number of prime mortgages in default began to increase. In August 2008, US government officials began to become concerned as the stock prices of Fannie Mae and Freddie Mac, governmentsponsored entities that were linchpins of the housing market, slid sharply. On September 7, 2008, the US Treasury Department announced it was taking them over. Events began to move even faster. Few days after the Lehman Brothers, the Merrill Lynch and the American Insurance Group declared their bankruptcy too. The bleeding in the stock market stopped only after rumors trickled out about a huge bailout plan being readied by the federal government to save the financial system and restore confidence within. The first reactions were not positive. Banks in England and Europe had invested heavily in mortgage-backed securities offered by Wall Street, and England had gone through a housing boom and bust of its own. Losses from those investments and the effect of the same tightening credit spiral being felt on Wall Street began to put a growing number of European 27


institutions in danger. Over the weekend that followed the bailout’s passage, the German government moved to guarantee all private savings accounts in the country, and bailouts were arranged for a large German lender and a major European financial company.

II.1.2. The second phase: The economic crisis But how could the financial crises become to economic crises? The economic growth is ensured by the continuous production and consumption. However in the previous years consumption has been mainly financed from credit not only in the US, but in the other developed countries too. Individuals practically could buy everything from loan; not only real estate, but electronic devices, cars and durable articles of consumption too. Because of continuously arriving news about more and more banks that went bankrupt, it has become extremely difficult to get a loan compared to the old practice which had crucial effect on consumption; if citizens buy less cars (because they are not able to get a loan), then there is no need to produce as much of them as it was previously. So the decrease of consumption brings along the decrease of production what leads to the increase of unemployment and to the decline of economic growth. The intensification of the international financial crises in the fall of 2008 dramatically changed the international economy and within it Europe’s prospective of its economic growth regarding the next 1-2 years. In the fall of 2008 the European Commission reckoned with decline in the European economic growth. They moderated the European Union’s economic growth from the 1.4% level of 2008 to 0.2% regarding 2009 while for the year 2010, the Commission calculated with 1.1% GDP growth. In November 2008, the OECD made very similar calculations concerning the EU’s economy. According to them the European economy has slipped into a recession with its 0.9 percent decrease which will last through the middle of 2009, and recovery will be slow as consumers cut spending to rebuild lost wealth. "As financial conditions normalize and the housing downturn bottoms out, the economy is projected to grow again in the third quarter of 2009, albeit at a moderate pace

28


since consumer spending is likely to be restrained by reduced confidence and loss of wealth"18. “According to the Reuters’ poll made in the first quarter of March 2009, Hungary's gross domestic product will shrink by 4.5% this year, which would be the worst recession since the early 1990s. As the 1. Diagram shows, GDP estimates have been eroding for months. In the February Reuters poll the respondents projected “only" a 3.5% output fall for 2009, while six months ago they expected growth. Interestingly enough, back in early 2008 there were estimates for a GDP growth of over 4% for 2008, while the most pessimistic prognosis in the current survey is for a 5.6% fall. 1. Diagram

Estimates for 2010 also dropped. While last month the consensus call was for a 0.9% growth, the current median forecast is only for a 0.3% output increase. This implies that the local economy will stagnate next year at low levels reached this year. The central bank (NBH) is even more pessimistic, seeing a 0.5% contraction in 2010 following a 3.5% decline this year. According to the article of Portfolio.hu, Michal Dybula analyst at BNP Paribas in Warsaw told that because of the shortage of loans and the fiscal and monetary tight it is very difficult to forecast how deep the recession will be. “19

18

Economy contracting, slow recovery seen: OECD, Tue Nov 25, 2008, 1:04pm EST,

http://www.reuters.com/article/newsOne/idUSTRE4AO2Z920081125, 25.03.2009, 10:30 19

Market sees 4.5% GDP contraction in Hungary in 2009 - Reuters poll, Thursday, 19, March 2009

04:06:00 PM, http://www.portfolio.hu/en/cikkek.tdp?k=2&i=17196, 25.03.2009, 10:22

29


II.2. The financial crisis effect on the Hungarian financial market The financial crisis influenced consumer habits because it has impacted the countries’ economy harshly. To understand better the environment where the financial culture in question lays there is need to present the current financial state and trends of the Hungarian financial sector. Thanks to the negative sounds of the media and Hungary’s continuous downgrading there have been rumors about the weakness of the Hungarian financial sector. To compromise the situation the National Bank of Hungary (NBH) and the Financial Supervisory Authority (PSZÁF) has precisely monitored the status of the local financial system to calm citizens and investors as well in the beginning of March 2009. They announced that the financial status of the Hungarian banking system is sound and the depositors' money is safe. Depositors do not have to panic because the Hungarian banking system has different structure compared to the US. Hungarian banks are more stabile, because they didn’t carry out as risky transactions as their US counterparts, so the probability of the same bankruptcy avalanche that has been experienced in the US is very low. The two authorities’ previous declaration was very important because in case of an accidental deposit-panic the Hungarian banking system could rock from its basis. Additionally the Hungarian Parliament modified the deposit guaranty’s amount to 13 million forints and eliminated the previously existing own-found for the government’s request. The Parliament declared that the Hungarian government guarantees depositors’ indemnity even if it would mean additional payments which they won’t be able to finance from the National Deposit Security Found. Anyway, the Hungarian financial system is strongly integrated in the European financial structure. The big US and European banks’ liquidity and solvency situation carries ambiguity, because nobody can foresee how it will impact Hungarian banks parent companies’ stability. On the other hand there are some analyst who sais that Hungary has made a lucky hit when it led to enter foreign banks’ subsidiaries to its market, because huge international banks can finance their loss made in one country by rearranging the better turnover to an other and by this way banks do not have to go directly bankrupt. The market turbulences’ impact on important banking groups in Hungary has been moderated by their relatively favorable liquidity situation thanks to high household source proportion and to the more equilibrate capital situation which is considered better than 30


of those in the epicenter. According to this the market turbulence caused by the secondary mortgage market crisis doesn’t have direct effect on the Hungarian economy’s output and on the financial market. In developed countries prosperity expectations are deteriorated by the financial system’s inconvenience. The financial system is adjusting to the increasing expenses of the foreign currency and forint assets by rising credit’s interest rates and by aggravating lending conditions which derogates the real economy’s output. There is a much more alarming fact concerning the banking sector’s lending habits even if the lending is expected to slow down. Till now days, Hungarian banks tried to maintain their profitability by additional credit substance expansion, taking more and more risks, offering hazardous financial products. In the US the so called NINJA credits have been common (causing many problems now days), but in Hungary it is a relatively new, imported phenomena to rise financial institution’s profit whether or no. NINJA is the abbreviation of clients who have No Income, No Job or Assets, but financial institutions granted loans to them. In Hungary many banks have given money for skyrocketing interest rate for creditor companies (which are very similar to the US kind Special Purpose Vehicles) to make them granting loans to clients who are presented on the BAR-list. Now it is very probable that these creditor companies won’t be able to finance their assets because of the non-liquid property loan market and the low demand for real estates, so they will go bankrupt. In this case the creditor banks have to redeem the creditor companies’ credit portfolios in normal international economic conditions. But in Hungary the government has agreed with the Bank Association that banks do not have to redeem the credits if the previously mentioned situation occurs. “Currently the credit standards easement’s stoppage and the rise of credit’s interest rate show that risk-based competition’s intensity will not grow any more. Many bigger Hungarian banks announced the intermission of foreign currency credits in the fall of 2008. They made this decision for their own and the financial market’s safety. In that period they announced further aggravations in their credit policy (higher own-found proportion, more precise creditworthy review and request for income certificate). On the contrary there are sings referring to the sharp risk-based competition’s endurance; credits with low ownfound, the appearance of new, more risky products as insurances combined with foreign currency credits and the agent sale expansion.

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The Hungarian financial market and banking system is has serious financing risks even if it is already stabile. Bond yields have long-lasting liquidity premiums and while banks increasingly depend on foreign resources, their duration is shortening, but financing expenses remain high. High foreign and national currency financing expenses result in high credit and deposit interest rates. The stricture of international money market’s liquidity can be experienced in the rise of Hungarian bonds’ liquidity premium rise and the diminution of the banking system’s sources. All the previously mentioned increase liquidity risks and the deteriorate credit conditions. Deteriorating credit conditions jointly with unexpected maleficent macro economic output and the negative effects of numerous expense-shocks contribute to the credit slow down to the private sector and to the fast deterioration of portfolios’ quality. Positive sign on the contrary is the Hungarian financial system’s strong resistivity against shocks. It means that banks have sufficient profit creating ability and they have enough and stabile quantity of capital. The short-term liquidity management of the Hungarian banks is adequate; the quality of banks liquidity management can be seen by the concordance of the existing assets’ and liabilities’ expiration (more market liabilities expires compared to the assets, more the bank depends on financing and would have higher risk of renewal).

Short term wholesale liabilities (below 1 year maturity) per total assets (%)

2. Diagram 100 90 80 70 60 50 40 30 20 10 0 0

20

40

60

80

100

Short term assets (below 1 year maturity) per total assets (%) Source: Magyar Nemzeti Bank – Jelentés a pénzügyi stabilitásról, October, 2008, p26

The 2. Diagram shows that at the end of the second half of 2008 the majority of Hungarian banks and all the bigger ones have been under the 45 grade line. It means that if banks in

32


question wouldn’t accomplish additional credit emissions in the following year they won’t have net financing need on the money market. Anyway in the financial sector an increasing competition for the citizens’ sources can be experienced. Because of deteriorating financing condition caused by the crisis on the secondary mortgage market the Hungarian banking system increased its demand for stabile and relatively cheap household deposits what has been made to finance the banks additional lending. By rising interest rates on deposits and special interest rate offers, banks have been able to control the decline of household’s deposits proportion within foreign liabilities. (3. Diagram) 3. Diagram 30

%

% 7

3

20

2 Jun.08

22 Mar.08

4

Dec.07

24

Sep.07

5

Jun.07

26

Mar.07

6

Dec.06

28

Directly placed deposits of households per external sources Indirectly placed deposits of households to external sources (right hand scale) Source: Magyar Nemzeti Bank – Jelentés a pénzügyi stabilitásról, October, 2008, p27

The main part of sources that Hungarian banks received in the second quarter of 2008 have been placed in foreign currency deposits. On the one hand the explanation can be the change in citizen’s exchange rate expectation; on the other hand clients want to put their money in more secure financial products, because they have suffered a huge loss in turbulent periods. Although the significant stock retirement regarding the investment founds in the second half of 2008, the market proportion of guaranty and liquidity founds were increasing. These founds are very important for banks, because of the recirculation of sources. Thanks to that the recirculated sources substance have increased nevertheless the decline of investment founds’ instrument substance. The dependence of foreign sources can be the obstacle of credit increase, because of the increase of financing expenses and risks. The increase in

33


the amount of citizens’ deposits is still remains under the tendency of growth of lending, so the Hungarian banking system may have to increase its foreign source involvement. The substance of foreign sources already exceeds the 35% of externals sources. (4. Diagram) 4. Diagram 100% 80% 60% 40% 20%

Domestic wholesale source

May.08

Jan.08

Mar.08

Nov.07

Jul.07

Sep.07

Mar.07

May.07

Jan.07

Nov.06

Jul.06

Sep.06

May.06

Jan.06

Mar.06

Nov.05

Jul.05

Customer deposit

Sep.05

Mar.05

May.05

Jan.05

0%

Foreign market source

Source: Magyar Nemzeti Bank – Jelentés a pénzügyi stabilitásról, October, 2008, p27

Parent banks still prefer Central-Easter-European countries for liquidity allocation which is a positive development. But foreign financing conditions are derogating. Compared to the levels in the beginning of 2007 financing expenses are still high and foreign sources expiration date is always nearer. Banks financing themselves from foreign sources more and more shorter term what render the sector fragile against money and credit market turbulences. The banking sector should prepare the deterioration of financing conditions and have to adapt to the unfavorable environment by the modification of their market activity. Jointly with the development of liquidity management banks should rethink their business strategy and slow down their credit growth. Concerning credit structure in the beginning of 2009 the recruitment of the Hungarian currency changed the structure of credit structure. Regarding the house loans in Hungary and in Europe the practice is different then in the US. In Hungary the so called “bonded lending” is prevalent which means that the bank covers the long-dated property loans (for 10-20-30 years) with short-dated ones (for maximum 5 years), issuing the debt additionally by the emission of promissory note which incorporates the debt in question. So, if the debt behind the loan defaults, the bank (if it is able to) stands as a guarantor for bondholders. Sometimes it is called as “loan elevation”; when the bank is considered more

34


creditworthy (this includes the security provided by the pool too) than its property loan clients it can rise the creditworthy of bondholders. As the 5. Diagram reflects household credits show slow down. 5. Diagram 1600 HUF Bn 1400

HUF Bn 1600 1400 1200 1000

800 600

800 600

400 200

400 200

0 -200

0 -200 Dec.01 Mar.02 Jun.02 Sep.02 Dec.02 Mar.03 Jun.03 Sep.03 Dec.03 Mar.04 Jun.04 Sep.04 Dec.04 Mar.05 Jun.05 Sep.05 Dec.05 Mar.06 Jun.06 Sep.06 Dec.06 Mar.07 Jun.07 Sep.07 Dec.07 Mar.08 Jun.08

1200 1000

HUF housing loans FX housing loans Total households' credit

HUF Consumer loans FX Consumer loans


In contrast with non financial corporations in the household sector growing tendency of Hungarian banks’ credit substance is slacking because of the basis-effect, but it still exceeds the GDP’s expansion tendency. Unfavorable income expectations and the growing interest rates render difficult for households to maintain consumption and investments financed from loans. The high proportion of earning-related debt burden can pull the credit trend’s turn over. Even if in the second quarter of 2009 the household portfolio has been in progress, it can be considered temporary because of discrete effects. The proportion of bad credits may multiply; portfolios’ maturity, macro economic environment’s unfavorable conditions and credit conditions’ aggravation have to be blamed for that. Through expense shocks caused by commodity price and credit interest rate rise, increasing substance of bad credits creates more sever insolvency problems for households, while the same situation can occur in corporations, but concerning the competition sphere, expense shocks have been caused by salary rise. To cover the portfolio loss the Hungarian banking system has enough credit and income reserves, but the increasing credit risks decrease banks’ shocks resistance. The boost of the Hungarian currencies value doesn’t impact citizens borrowing behavior as it does in case of corporations. Nevertheless the exchange-rate boost the foreign currency credits tendency still lasts. There are few household credit products available on the 35


market which permits change of foreign currency. Household mortgage loans expiration is characteristically 10-20 years, so individuals choice do not depend on exchange-rate alteration, but the difference of the installment derives from the margin between Hungarian and foreign interest rates. Favorable development is the yen based lending’s decrease; banks play key role in it eliminating or holding in yen based credit products sale because of increasing risks. Banks cut back their Swiss franc-denominated loan supply significantly too. Lending conditions are becoming more and more sever in Hungary following the international tendencies. Mostly because of financing expenses increase lending conditions are deteriorating. Regarding price-kind factors interest rates are significantly increasing concerning households and corporations too. (6. Diagram) 6. Diagram

1,4

percentage point

1,2 1,0 0,8 0,6 0,4 0,2

LIBOR change

EUR corporate loan interest rate by the

CHF home equity loan interest rate by the CHF home equity loan annualised percentage

CHF home equity loan interest rate by the

CHF home loan interest rate by the amount of CHF home loan annualised percentage

CHF home loan interest rate by the amount of

0,0

Passing-on of increased funding costs due to higher spreads


Interest rates’ increase compared to developed markets has been higher because of risk premium rise. Personal finance is in decrease and it seems to come to a halt; there is no chance for more facilitation. If current boost of financial turbulence endures it can bear high risk. Rise in financing expenses caused by market turbulence can generate additional aggravation of price and non price-kind conditions. Unit-linked products expansion is continuing; investments attached to mortgage loans are popular; agents are selling always more and more products like this. Besides unit36


linked products credit redemption has more importance. If agents are able to sell adequately, credits and savings availability increase and if clients change bank its expenses can be decreased as well. On the contrary non adequate agent practice increases the risks of financial stability. Agents who do not have sufficient incentives and qualification can contribute to indebtedness and by selling credit products to not creditworthy clients, credit risk increases. The Hungarian banking system’s foreign parent banks haven’t showed yet signs of difficulties in their operation. In the developed countries of Europe the secondary mortgage market crisis can be experienced by the interconnection of interbank markets, by the rising financing expenses and by the drastic spread of distrust crisis. Carries doubtfulness how will affect the stability of Hungarian banks’ parent companies the present liquidity and solvency conditions of US and European big banks together with the distrust crisis. The market turbulence had direct effect on few parent banks yet, but the amount of their loss is negligible. The market turbulences effects on foreign banking groups in the Hungarian banking system has moderated by their relatively good liquidity position thanks to the relatively high proportion of household sources. Their capital conditions are more equilibrate than those banking groups in the epicenter. In their business activity and in the past years’ profit rise incomes derive from traditional interposal played key role thanks to the significant credit expansion in the Central-Easter-European region.” 20 To help the financial market’s participants and foster foreign investors’ confidence Hungary's Ministry of Finance announced in March, 2009 that OTP Bank and FHB have been granted a HUF 520 billion loan from the government. The source of the money is the IMF package granted to Hungary last autumn. The banks will receive the government funding in four different foreign currencies, which will be used to promote local lending.

II.3. Consumer habits in the current financial environment reflecting the quality of the Hungarian financial culture After I presented the current trends of the Hungarian financial sector’s current conditions and tendencies I would like to drive the attention to consumer habits which is the

20

Magyar Nemzeti Bank, October, 2008: Jelentés a pénzügyi stabilitásról (Időközi felülvizsgálat)

37


mirror of their financial literacy or illiteracy. Moreover by getting to know consumers’ request and aspect that influence them when they resort financial products and services both part can be understand better and financial culture can be developed more efficient. The financial sectors’ quality and state seriously influence consumer habits which are strongly linked with quality of financial literacy; in hard times as nowdays consumers without adequate financial knowledge can panic more easily and in line with this they can make wrong decision and suffer huge financial loss. The economic and financial crisis caused panic and concern within Hungarian consumers and influenced their financial decision making. “By the worsening of the financial crisis Hungarian citizens are more pessimistic regarding the future. They do not feel safe and they are lack of confidence in politicians and in the financial sphere’s participants. According to their opinion the country’s economic condition is deteriorating arm in arm with the population’s living standard. Citizens and their families have to face with serious financial difficulties. Pessimistic forecasts are spreading from December, 2008 and in February, 2009 there are notably more citizens who see very dark their financial prospective. In contrast with last year’s moral there are increasingly more people who at least weakly orientate in financial-economical questions. Within these conditions people want to influence, want to manage more the happenings around them. They want to understand, want to have a broader view on financial phenomena. As their concern is increasing, their orientation becomes more prevalent (for example compared to last years’ data the on-line economic-financial newspapers’ reading has increased significantly). Especially in current conditions consumers’ decision making is strongly influenced by the news they read and hear from the media about the Hungarian financial system. Naturally and evidently it would be more difficult to make panic and to make unaware financial decisions with adequate financial knowledge.”21 Talking about the financial sector’s quality the following issues have to be taken into consideration: 1. Costumers what kind of financial products are looking for on the market? 2. How current is the usage of credit card, bank account, net banking and so on? 3. Do consumers have savings, and if they have so

21

A válság már kézzelfogható valóság, Thursday 19 March, 2009, 3:25pm

http://index.hu/gazdasag/magyar/2009/03/19/a_valsag_mar_kezzelfoghato_valosag/, 23.03.2009, 11:16

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4. Do costumers claim to invest and if they do so who do they empower with the management of their financial affairs? 5. Regarding pension founds and insurance policies what can be told about their popularity, do consumers invest in them thinking about their future? 6. How the substance of credits is, what kind of credits are searched by consumers the most? To find the question for the above mentioned I’m going to use t, let’s say most authentic survey of the market. The first one was made by Millward Brown Hungary, published in September 2006 about “Knowledge and experience about bank relay”. The second one was made by the Hungarian Competition Authority (GVH) in February, 2009 about “Relay in case of certain financial products for households and SMEs”. By reading through the whole reports I think both of them gives broad and sufficient information about Hungarian consumers habits in the financial field. The third survey was made by the Scale Research for the request of the Hungarian Competition Authority, published in March, 2007 about “Citizen-bank relationship, aspects concerning bank selection and bank relay obstacles”. According to Millward Brown Hungary’s report the Hungarian bank market is intensely concentrated; the OTP Bank is the most well-known and the most penetrating financial institution in the market. I think this has not changed in the last 2 years. For the majority of consumers the OTP is still “the Bank” that is why they usually say “I bought a television with OTP credit in the electronic equipment shop” while the provider for the credit has been an other financial institution for example the Cetelem or the Budapest Bank. In banks operating in Hungarian there is eight which can be considered well-known widely (OTP Bank, Takarékszövetkezet, Erste Bank, K&H Bank, Budapest Bank, CIB Bank, Raiffeisen Bank and Citibank). OTP Bank emerges from this group, because it has the absolute leader position in the household banking market; more than the half of the respondents who has participated in the survey thought about the OTP Bank when they were asked. Most of the respondents mentioned the HVB Bank, Cetelem and ING Bank when they saw their logo. The previous statements reflect the strong even statistical coherence between banks’ reputation and its clientele’s extent. The target group’s majority (91%) is just one bank’s client, it can be told that only those are the clients of more banks who claimed for credit. In general it can be said that young adults, citizens with higher graduation and income, 39


Internet users, residents in big cities, debit card users and those who want to change their bank account. It can be seen that those whose financial literacy is more sophisticated know more banks and for them the financial sector is more transparent. They are usually those whose must is to be well informed because of their financial need, or those who by their work or by their education willy-nilly met with financial issues which developed their knowledge. The Millward Brown Hungary’s report figured out that banks represent a low innovative category for consumers. This statement shows that consumers are not interested too much about banks. Most of the consumers regard to banks as an office and not as a modern supplier centre. This derives from the routine and habits of the socialist era when the variety has been limited between financial institutions (OTP Bank or the Takarékszövetkezet) and the attendance has not been costumer focused. The usage of banks products and the acquisition of their services do not provide emotional happiness in general and consumers rarely need additional banking products so they do not follow actively financial institution’s variety of supply. In general Hungarian consumers are lack of knowledge about financial products and financial issues, maybe that is the reason why they feel uncomfortable (and unsafe) when they have to merge in financial and banking issues. The lack of basic financial knowledge in practice means that clients can not make difference between banks, they are not able to compare precise, detailed conditions and services and they do not want either (because they see them very complicate for the sake of many different component). They do not know in general the precise conditions (neither they do their own current accounts interest rate) according to this they become wedded to the bank where they open the account first (if the attendance is adequate for them) so by this they can avoid the uncomfortable bank alteration (which uncomfortable because they are lack of knowledge and they can not decide between banks). From the survey of Millward Brown Hungary emerged that the general attitude to banks is increasingly negative. The population regards to financial institution with antipathy because they are making too much profit while people feel increasingly more burden on their shoulders. Consumers leave huge sum of money in banks for adequate management and most of the cases for moderate profit, but even so, financial institutions did not managed them as important clients. Clients in many cases find banks’ environment very rigid, very serious and very elegant which makes them frustrated. They have the feeling that they do not belong there and that does not made for them. 40


Clients find banking expenses extremely expensive (which is true, compared to salaries level banking expenses are really high). According to them consumers credits are too expensive, they have to repay twice of the borrowed amount and in addition they do not want to pay for certain things; to make it more clear except CIB Bank and UniCredit Bank, clients have to pay everywhere to withdraw their own money from their own account. Concerning credits people are very skeptic in general; they find the procedure too complicate and the bank too exaggerated regarding the covers. Many people think that banks grant credits only to those who do not have real need for it (because only those can suit for banks’ creditworthy examination who have many possession for cover or enough capital) . I do not agree with this point, because aware and precise creditworthy examination is especially important nowdays because of many bad credits. On the other hand many people can not receive credit because they do not confess their real income even if they would be able to get it in base of their net income (this is usually entrepreneurs’ problem). Regarding sales finance only 21% of respondents were disposed with it; its 11% was personal finance and 10% was car finance. While the personal finance is more in demand by country side residents with lower income between 30 and 39, the car finance is more popular within young males in their thirties, with higher income and graduation. Usually the major part of consumers possess sales finance for 1-2 years which duration is in general for 4-5 years and the amount of the credit remains under HUF 500.000 with less then HUF 30.000 monthly redemption. Most of the sales finance is in Hungarian Forint, but nearly every third consumer disposed with this credit in Swiss Franc. According to clients opinion their credit granter bank has the right to change only the expense related details during the credits duration and they can not accept the change of the credit’s duration or the type of currency. Regarding expense related items the 17% of respondents think that during the duration banks do not have the right to change anything about conditions. Consumers choose credit types very differently; most of them is searching among the given banks’ offers, only every fourth consumer decided about the credit at first and then about the credit granter financial institution. For the one third of clients did not have down-to-earth option when they had to ask for a credit (they are generally those who are disposed with car finance, because in this case usually care sellers have already engaged with a certain financial institution. Clients can not choose the bank in case of car finance, because seller works with only one creditor institution and clients usually do not think about 41


alternative solutions, namely to inform themselves somewhere else as well. So on one hand compulsory played key role in case of car finance and leasing, while on the other hand in case of personal finance the credit’s granting promptness and its flexibility had capital importance. References, beneficial conditions and if clients have their already existing bank account in the management of the bank can give a stroke in bank selection (naturally if it is possible). In total consumers are meanly satisfied with personal finance (they have problems mostly with attendance and the least of all with the interest rates level) and they think that every other bank except their creditor has better conditions (this is the typical “the neighbors’ grass is always greener” I think). Although their majority has heard about credit transfer to an other financial institution (it means that an already existing loan can be financed by an other provided by a further bank), but only few clients thought to do so. On the other hand even if every financial institution has to provide pre-financing possibilities half of the clients do not know anything about this. House loan clients think the same about their credit as sales financing clients; the majority is satisfied with their credit built-up, only a little part of them has already thought to bring their credit to an other financial institution. Relatively house loan clients are the most ready to change their credit provider. The motivation for this would be the alluring lower expenses. Generally house loan clients disposed with credit which do not exceeds HUF 5 million and its monthly redemption does not exceeds HUF 50.000. When the Millward Brown Hungary made its survey the two third of respondents had their loan in Hungarian Forint and one quarter of them in Swiss Frank. Loans in euro are very rare. House loan debtors think the same as sales finance clients; according to them during the duration of the loan banks have the right to change only those items which are related to expenses. In case of house loans, clients are motivated the same way to choose a certain financial product and the provider institution as in case of bank account selection, but beside general aspects (fine conditions, accessibility, and recommendation of acquaintances) it is important too which bank considers the client credit worth. With house loan claims clients are satisfied above the average and according to them their banks perform moderately better than the market average. The only attribute which comes with the highest satisfactory is the quality of attendance and on the contrary the interest rates level and the acquisition expenses of the credit evoke discontent which although remains mediocre. The majority of the clients would select the same loan

42


built-up and the same credit provider financial supplier if they have to ask for a new house loan. The two third of clients have heard about credit transfer possibility, but less then 13% of respondents have ever thought about it. 6% of those who have ever had house loan think seriously about to transfer it loan to an other bank. The majority of those who do not want to transfer its loans explain their point of view by the possibly emerging plus expenses, difficult administrational process and the current credit built-up’s satisfactory functioning. As in case of sales financing, clients with house loan can be attracted to transfer it to an other financial supplier by lower monthly expenses and lower redemption conditions. Regarding house loan possessors those proportion who know about pre-redemption facilities is higher than the same in case of sales financing; but more than the one third of clients do not know this facility. 40% of house loan possessors think that credit transfer to an other financial supplier is difficult, because of high administrative expenses and complications (this is the highest proportion compared to sales finance and bank account possessor’s opinion). The Hungarian population’s banking habit is usually concentrated to the basic services. On the 7. Diagram most popular banks with their most frequently used services are presented. 7. Diagram

Source: Millward Brown – Bankváltással kapcsolatos ismeretek és tapasztalatok, September, 2006, p18

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In general irrespectively of banks consumers resort the most popular services according to the following proportion (8. Diagram): 8. Diagram

Source: Millward Brown – Bankváltással kapcsolatos ismeretek és tapasztalatok, September, 2006, p19

The waste majority of consumers use basic bank services (bank account, debit card and bank deposits). In case of crediting they use credits for a concrete aim; to buy a car, a house or a certain good. Electronic products are not diffused, because Internet usage is still low in the country, it is expensive and the confidence effects are low too. Clients still prefer personal administration, because they believe more what they have said personally. Personal relations ships are more important with financial institution employees in the country side where people are more people and relationship focused. It is characteristic too that people do not know banking terminology or know it defective and use it imperfectly; for example they compound the term “credit card” with banking card of the account which has credit limits. Additionally the majority of consumers do not know or use faulty the EBKM (Standardized Bank Interest Rate Index), the EHM (Standardized Stock Yield Index) and the THM (Total Credit Expense Index) expressions. The Hungarian population’s banking habits are not sophisticated, the majority resort the basic services (bank account, bank deposit and sales finance). Most of Hungarian consumers have the same bank account for at least 5 years, but one quarter of consumers are the clients of the same bank account executive financial institution at least for 10 years. Even 44


so bank account diffusion in Hungary is lag behind the European average; according to the European Central Banks (ECB) data, per capita number of bank accounts came out at just the 75% of the European Union’s average at the end of 2005. The bank accounts market shows expanding tendency in Hungary; again according to the ECB’s data (which incorporates Forint and foreign currency based accounts too) in the period between 2001 and 2005 shows an annual increase of 4.5%, so in 2006 the adult population’s 74% were disposed with at least one bank account. The majority of clients have an account where they have to pay for everything else except account execution. It can be told that bank account possessors are disposed with debit card too, only every fifth client does not have one. The transfers, acquisitions with debit card and renewable credit limits with credit card can not be considered frequently used and well-known by the public. Regarding administration personal attendance is the most important factor; it follows that electronic services do not used regularly and only by few clients.

En mass electronic debit cards are more popular than embossed ones.

Concluding experience related to debit card usage it can be said that, active, already working young, (30-89 years) capital city residents with salary higher than HUF 50.000 projecting to open even an additional bank account, internet users, those who consider bank expenses high, but opened their bank account at least five years ago are disposed with debit card in a higher proportion. Regarding debit card usage nearly every debit card possessor uses its card for money withdrawal, usually once or twice a month. Every third client do not use debit card for acquisition and its frequency lag behind money withdrawal’s frequency. Electronic banking transitions’ frequency can be considered low; internet banking, mobile banking and telebank services are used only by every tenth client. The reason I think is the complexity, the infrastructure dependency and people’s disinterest. According to a survey made by the MasterCard in 2007 the Internet shopping facility is four times more attractive for 18-30 year old young adults than normal shopping with debit card. The frequency of Internet shopping with debit card increased nearly four times more than traditional debit card payment in 2007. The survey figured out too that 18-30 years old people’s 81% use debit card, but only 6% of them are owners of it. Young people in 57% use it for money withdrawal, in 48% for shopping, in 36% for mobile phone fill up and in 27% to strike their balance. Only 16% used it for Internet shopping in 2007, but this proportion has been increased during the years. But what is the most important statement for me of the survey that young adults are more 45


innovative, if they begin to use more complex financial assets and especially if they are educated to use them sufficient the next generation’s financial literacy can be significantly developed. From the previously mentioned three services the most used is the telebank service. More than half of the bank account possessors do not use the four kind of transfer possibilities. Considering the separate saving and investment products’ low popularity bank deposit can be still considered the most attractive saving type within bank account possessors. Inasmuch as only every third client can save a certain amount of money in every month, it is not surprising that bank deposit has been tried by just the one third of bank account possessors. Bank deposit is use by only every eleventh client regularly. Appropriation can not be considered part of the everyday banking activity; majority of clients do not have appropriation, however the one third of those who can use this facility related to their bank account never live with it. At the same time nearly the one third of consumers uses their appropriation monthly. It is interesting that people choose banks according to emotional and not rational process. It means that people would like to manage bank selection on rational base, but they are not able to do so, because they are lack of adequate information and knowledge, that is why they make a limited rational decision or make a purely emotional decision. When they have to decide on new offers they pick up one or two conditional point which seems advantageous and compare only those with offers provided by few other banks. They are not able to compare the whole condition list, because it would be extremely complicate for them concerning that they are lack of sufficient financial knowledge. According to this they only pick up maximum three offers of three different banks and compare only them. People before begin to use a service inform themselves generally in one or two financial institutions about possibilities and conditions. Usually the bank where they have account is one of this two. Clients can become emotionally affected to their account executive bank in base of their personal experience about the administration, according to other’s personal opinion and the image suggested by banks (that’s ways advertisements and banks internal formation –style, colors, furniture- count a lot for the client-bank relationship development. It is very interesting that even though clients are not fully satisfied with services received from the financial supplier they change bank rarely. It has been figured out that the reason for the low proportion of bank relay is not else, but clients frustration and laziness. 46


They regard to this process very tiring, problematic and complicated. This is usually a perception and not a personal experience. People do not concerned about too much assumption what banks put up to remove the old account and open a new one, but they are more concerned about too many details what they have to arrange personally. For example they have to inform the employer about the new bank account, they have to remember the new pin code of the new card, they have to get to know the administrating process in the new bank, maybe they have to go to every each utility service supplier to declare the new bank account, there would be need to ask for a new financing facility from the new bank, and so forth. This is the reason why strong negative emotions anticipate the bank relay. In many cases consumers decide to change because of compulsion (for new financing they have to open a new bank account or simply they have to have a new one because their employer decide to transfer their salary there). Beside of this it can be said that they have no claim to try the services of other banks, because they think that in general services and conditions are the same everywhere. When consumers select bank the main aspects their decision are the following; banks’ reliability (because they can clearly remember the scandals and bankruptcies happened many years ago with Postabank and K&H Bank. They have the most confidence in old, big banks; according to this they trust in OTP the most.) The other factor which has key importance in consumers’ choice is the bank’s closeness and accessibility. This aspect is important, because clients like to manage their affairs personally, but beside this, consumers evaluate the money withdrawal possibilities, namely how many ATM has the bank in question near to the consumer (most of the consumers withdraw their salary from their bank account with one or maximum two withdrawal in a month). Clients really care about the quality of personal attendance. This is the main encounter point of banks and consumers which means that a negative experience can be compensated really difficult even with more positive experiences. Clients expect warm attendance, correct and transparent information giving, professional savvy and help from administrators. They can hardly justify administrators’ knowledge concerning their work, so they decide according to his or her comportment. For Hungarian consumers who are intended to resort a financial service, fine and competitive conditions are essential; in many occasions this is the most important aspect for them which they emphasize if they are asked about it, although from the qualitative surveys

47


can be seen that the reason for the allusion of the above mentioned is to rationalize the process, because consumers examine only certain details of the offer. Regarding savings the population is still prefer bank deposit, mostly the Forint based one. Life insurance has begun to be the second most popular saving form, showing an increasing tendency. According to the Gfk Hungária’s survey made in 2007 when citizens were asked how would they invest HUF 7 million the 27% of respondents have been completely puzzled, only one fifth of them decided to put it in a low risk, but low interest rate provider bank deposits. Just the 20% of respondents would search for other form of investment which has not been examined by the survey. 8% of respondents would by bonds while 7% would underwrite a life insurance and the same percentage would invest their money on the stock exchange (9. Diagram). 9. Diagram

Source: Bacher János, Gfk Hungária, 11 June, 2008: A lakosság pénzügyi kultúrája, bankolási szokásai Magyar Fogyasztó 2008. konferencia

The problem with savings in Hungary is very simple; people have low income and at the end of the month they usually do not have either a forint to put apart. From 2007 insurance companies’ income is increasing very moderately. They have to combat with always more serious difficulties to make their clients think about pension and their future when they will be retired. Their clients have to affront with daily financial problems; increasing expenses, but decreasing salaries (10. Diagram).

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10. Diagram

Savers presence n=2000, Savers presence in the highest income group n=231, In AB status n=399, %, 3. question Source: Bacher János, Gfk Hungária, 11 June, 2008: A lakosság pénzügyi kultúrája, bankolási szokásai Magyar Fogyasztó 2008. konferencia

Although in the last period financial culture began to develop in Hungary and as a consequence people’s incline to invest and underwrite life insurance became more intensive, but the per capita insurance expenses in Hungary still lag behind the West-European’s. In 2008 insurance policy penetration did not achieve 2% while in the EU it is more than 8%. So insurance companies are continuously emphasizing the hazard laying in insufficient insurance polices and as it follows the necessity of financial education of citizens and the beginning of old years’ self-catering in time. The OECD and the EU is emphasizing its necessity as well; our society becomes older and older which is good news, because it means that medicine is improving and so does the standard of living. On the other hand with more retired people the budget has to carry more and more burden which it passes directly on workers. This is the bad news, namely that with an older society workers have to maintain more retired people by their contributions and taxes. There will come a time (which is not far) when the state will not be able to finance pensions and everybody has to take care about him or herself. There is need to communicate and explain this process to the population, they have to be prepared to rely themselves as early as they are able to. The society must not concern an unfavorable purely political step the self-reliance, but they have to accept what western countries’ societies have already accepted. Naturally there is need to converge the level of salaries to the western level otherwise all this concept can not work. So, institutions’, the state’s and the education’s task to inform citizens about the importance of self-reliance and 49


insurance, explain them why is it important to begin it as early as possible. There is an example for this initiative, namely the Foundation for Self-Reliance (Öngondoskodás Alapítvány), founded in 2003 by the Budapest Stock Exchange. The foundation’s initiative to change the Hungarian population’s saving and financial culture. They are combat to render self-reliance’s concept widely accepted and make citizens remember that they are the only one who is responsible for their own future. But there is a factor which must not be ignored; employers and especially the state have to provide adequate conditions for the execution adequate self-reliance with competitive salaries and with a more equitable and balanced taxing system.

III. Chapter III.1. The financial culture in Hungary The National Bank of Hungary defined it as the following; “The financial culture is the level of financial knowledge and abilities which contributes to the correct understanding of financial information and responsible financial decision making of individuals who will be able to calculate the possible financial consequences of their decisions.”22 In Hungary, households’ exposure to financial risks is continuously rising as a result of changes in demography, the economy and the financial intermediary system. The sector with the weakest risk management knowledge is becoming the final absorber of financial and capital market shocks. Several financial service providers are increasingly shifting risks - both on the assets and liabilities side - to households, the sector with the weakest risk management experience, thereby reducing the fluctuations in their own balance sheets and profit. Demographic changes (for example low fertility rate, extended life expectancy) make reform of the pay-as-you-go pension scheme unavoidable. The new pension scheme is increasingly based on self care and investments on the capital market are becoming more significant. As a consequence, individuals must bear the risk related to 22

Szolnokiné Papp Judit, 13 May, 2008: A lakossági pénzügyi ismeretek helyzete és fejlesztési lehetőségei

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savings (insufficient long-term savings, choosing an instrument inappropriate to one’s needs) and the market risks related to savings (payments may become volatile) and inflation risks (payments are not index-linked). Stronger competition and growing expectations of profit have reduced banks’ traditional smoothing behavior over time and risk-sharing in long-term service provider-client relationships. In the meantime the share of products exposed to price fluctuations on the market has risen. As a result of the accelerated development of product innovation, marketing, sales and communication methods, today an average household is faced with a large, complex and fast-changing product range. In order to increase sales, these instruments sometimes are used in a way to enhance households’ acquisition even if they are not in need which leads to the acquisition of non-proper financial products or services. The most important problem is that the majority of society has not taken part in any financial or economic training. Due to lack of appropriate basic knowledge, people have difficulty in learning about new concepts. They are not able to pass on sufficient financial knowledge to the next generation. The National Bank of Hungary puts great emphasis on developing financial knowledge; makes surveys, analyses and try to find theoretical solutions to financial literacyrelated topics. Although it is not a legal task, NBH has recognized the need to enhance financial culture, especially among the younger generation. In order to achieve these purposes the NBH has taken several measures over the past few years. Alarming picture has figured out about the Hungarian population’s financial knowledge and interest. “Most of the Hungarian citizens can not understand economic news; only 6% fully, 41% to a minimal extent, and 28% can hardly understand financial and economic related issues. It can be said in general that citizens are not aware of the basic financial and economic terms; for example only 70% of them know what does inflation means. I have already figured out previously that financial illiteracy can give ground to two main problems; consumers even though are not well informed and do not understand financial products’ conditions resort them which can cause them huge financial loss. On the other hand their financial illiteracy make them uncertain and uninterested about financial issues saying that they would not be able to make a right financial decision and as it follows, they are continuously loosing their confidence in financial institutions. Data show that 48% of Hungarian consumers feel that they do not have sufficient information to make a

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decision on investments, but 47% are aware of the process of share transaction and 44% of the securities. However Hungarian citizens begin to recognize the importance of saving and selfreliance unfortunately because of their law salary in general are not able to put money apart; 34% of Hungarian citizens could not make a living from their savings for any time, 16% could make a living for one month only and 27% for a few months which is an incredibly low rate. But it can also be figured out when Hungarian citizens usually have little money collected with much difficulty, so when they are finally able to put it apart they are extremely afraid to loose it; 70% were interested only in the safety of the investment rather than the extent of profit. 54% of Hungarians prefer options which allow accessibility to their money, (albeit at a lower interest rate) because of high level of insecurity. Even so citizens have to try to make savings, have to try to do not put themselves to charges which they are not able to finance. This is what the state, the financial sphere and the education system should foster; in place of spending and credit borrowing citizens have to concentrate on saving and self-reliance facilities and think realistic about their and their families’ future.”23 Regarding Hungarian financial culture the biggest problem is the irresponsibility which maybe derives from the general illiteracy. Unfortunately irresponsible consumer behavior twisted into the country by the transition to democracy from socialism. In the past 15-20 years the lifestyle has changed significantly and according to this consumer behavior transformed radically. The skyrocketing amount of goods and advertisements with the every day sales brought with themselves the “buying fever” (which is especially intensive before Christmas). While before the 1990s everybody knew where his or her place was in the social hierarchy, but after the transition everything capsized and everybody had to find their place alone. People could classify themselves according to their consuming habits, buying some kind of identity in many cases over their capacity. Many people in the past years have over estimated their credit capacity and by finding themselves in credit traps wanted to balance their credits with other credits. The other very characteristic phenomena when 23

Survey made by the Öngondoskodás Alapítvány, Befektetési Alapkezelők Magyarországi Szövetsége,

Marketing Centrum Országos Piackutató Intézet, Pénzügyi Szervezetek Állami Felügyelete, www.ongondoskodas.hu/get.php?dir=./db/events/files&file=20060130YC8DGV_sajtoanyag.doc, 20.03.2009, 17:42

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indebted people trying to maintain their living standard by an “it will be somehow” approach. There are many other debtors who are not able to and do not want to affront either with the cruel reality and when they ask for a loan (or for an additional one) trust in circumstances and optimistic foresees which they can not influence and sometimes do not understand as well. Regarding the current characteristics of the financial culture in Hungary on supplier side there can be experienced a harsh competition and because of this a higher pressure on financial suppliers they are combating seriously for new clients. To achieve their goal, to allure more clients and make more profit they do everything what they can; continuous innovation of products, less sever credit conditions, they are offering credits in foreign exchange, opening more and more banks, the sale of financial products by agent are increasing, a very significant marketing activity can be experienced while the price competition is sketchy. On the other, buyer’s side there can be experienced a very low interest and knowledge; Hungarian consumers are lack of basic knowledge, education and adequate example provided by the family either. Consumers usually are more interested in house and consumer credits as I have mentioned yet. Because of very favorable credit conditions and the Hungarian currency’s long-lasted boom clients have been more interested in credits in foreign credits (80% of new contracts of banks and 60% of their whole substance of credits are in foreign currency). Indebtedness is increasing and the redemption burden exceeds the average level of salary in the European Union. The very low saving rate gives reason for concerns and unfortunately the saving structure is typically very conservative. The maintenance of cash and the proportion of transactions with cash are especially high. The Hungarian population does not have sufficient experience about the free market economy maybe because of the socialist era. Parents and the family can not provide good example and useful advice to the younger generation because they do not have enough experience either. Many surveys showed that Hungarians accept with difficulty new knowledge and the beginning they have an indisposition for it. This is regrettable because in the last years the pressure of supply has become more and more intensive with the appearance of many new and very complicated products (for example the unit-linked insurance combined with foreign currency based bank deposit). However supply diversity has been broadening, but the conformation of clients’ knowledge has not followed this tendency. Clients make financial decisions on the ground of short-run aspects without getting to know the real risks. This is the reason why can we experience a broadening gap between the 53


financial knowledge and the risk which clients undertake. Exactly this is the reason why either financial institutions’ neither consumer’ common interest is to get more information and to make more discreet decisions, because risks can be lowered and problems can be avoided in the future. “There are increasingly more professionals and non-profit organizations trying to attract attention for more responsible and conscious consumer behavior worldwide. In an interview made by the Hungarian Telegraphic Office (MTI) Katalin Antal psychologist, the president of the Association of the Aggrieved Parties of Bank Credit (Banki Hitel Károsultjainak Egyesülete) told that because of irresponsible consumer behavior in Hungary increasingly more people would need psychic help and life guidance advices to escape from the tragic consequences of their blindfold. To help people in question in 2004 the above mentioned association has been established where professionals in credit issues, practicing and very experienced lawyers who feel important to help and represent debtors rights help people in need and defend them when it is necessary.”24 Nevertheless financial products are intangible goods, aware and abstemious behaviour from costumer side is much more important than in case of any other kind of goods. Unfortunately many Hungarian families have more than one credit and if any problem occurs with a family member who has earning capacity (health problems or a simple layoff) the family usually cannot pay (usually at first) the sales finance redemption. After they refuse to pay the redemption for the car finance, but till their very last “breath” they are trying to pay the redemption of the house loan to prohibit the loose of the real estate. “Analysts think that advertisements alluring with exaggeratedly advantageous credit conditions have to be blamed for the whole countries indebtedness. At the end of the last year the number of those who had savings touched the historical 19.2% bottom according to the survey of GFK Hungária. This data really makes thinking because in September, 2008 the same survey showed 23% which they considered the worst in the history that time. According to the European Commission’s very last survey the fifteen post-communist countries three from ten

24

Felelőtlen költekezés: út a hitelcsapdába, Wednesday 3 December, 2008, 10:44pm,

http://www.fogyasztok.hu/cikk/20081203/fogyasztovedelem_felelotlen_koltekezes_es_hitelfelvetel_valsag_elle nere/, 17.03.2009, 11:20

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people does not have any kind of saving. It can be thanked to the increasing mistrust to banks as well which the GFK Hungária measured over 60% at the end of the last year.”25 “Anyway the Hungarian population is in a very serious indebtedness. The debt rate (correlates the debt and the income to the GDP) is 53% while the European Union’s average is between 90-95%. But there is an other index, called average debt service rate (correlates the capital redemption and the interest rate to the regular salary showing the clients real credit expenses) which has increase to 15% from the 9-10% measured three years ago while the European Union’s debt service rate remained 12%. This is the data what creates concerns. It was only worst in the Unites States, i.e. 14% where the financial culture is as undeveloped as in Hungary but consumers incline to buy whatever they see is much stronger. Anyway the problem in Hungary is not the high borrowing incline of households, but the extremely high credit expenses and credit interest rates which are not only high concerning the Hungarian income level, but even they are higher then the European level too. Additionally credits duration is shorter, so the level of redemption is higher. The proportion of credits has turned around too; while previously the two third of lending has been appropriated to real estate acquisition and the one third to consumption, nowdays consumer credits represents higher proportion in even if they are much more expensive.”26 According to the data of the Association of the Aggrieved Parties of Bank Credit in 2007 clients complained about every kind of credits broadly in the same proportion. But if they have to be classified there were more complaints about housing loans, followed by car finance and lower amount of credit. In case of house loans the sum has been between HUF 5 and 10 million while in case of car finance it has been 3 million. The previously presented realty confirms why financial suppliers must not reassure clients to live above their means (not even if it is in contrast with its business interest) because it contributes to indebtedness, poverty and widespread economic problems within the whole society. Though I can not justify the expedience of the Kurt Lewin Foundation in the combat against poverty, but their aim have to be appreciated. They are engaged to help 25

GfK: Tizenhárom éves mélyponton a megtakarítással rendelkezők aránya, 09.12.2008:

http://www.ugyvezeto.hu/cikk/56856/gfk-tizenharom-eves-melyponton-a-megtakaritassal-rendelkezokaranya?wa=b2business08, 17.03.2009, 12:56 26

Kulturált pénzügyek, Heti Válasz, 9. évfolyam 8. szám, 19.02.2009:

http://www.hetivalasz.hu/cikk/0902/kulturalt_penzugyek, 04.02.2009, 10:57

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disadvantageous strata to fit in the society by formation and education. According to one of their new engagement they want to drive more attention to the financial development of these disadvantageous strata by working out a voluntary program. That financial institution which participates in it will be able to activate itself according to its fundamental function when they are teaching about the financial culture to needy young people. The financial institution’s employees’ voluntary involvement in this action can foster their engagement and loyalty for the institution in question. Concerning people’s financial knowledge and responsibility positive steps have been made thanks to the crisis; the government and the financial sector has never ever been so solicitous about financial illiteracy. The financial sphere as I will present it later arm in arm with the government, with non-profit organizations and with the competition sphere makes unprecedented steps to develop citizens’ financial culture, invest money in educational programs, in advertisements. Institutions operating in the financial sphere are making agreements with others, firming collaborative declarations with non-profit and governmental bodies to foster financial education towards the diminution of financial illiteracy. There are more and more economist, analysts, politicians and CEOs of the financial sphere who agree that Friedman’s “free market economy” can not work any more and the world’s financial system has sore need for sever regulations (or at least much more sever then before) otherwise the world will not be able to pull out from the financial and economic crisis. Even though most of the governments, as the Hungarian one believe in free market economy system, in current economic conditions when they are struggling to guide their nations out from the financial blackout, free markets can not work anymore without any interference. They know or at least they are understanding it nowdays that Mr. Friedman's thoughts could not continue applying for the current situation because financial regulators must review what they've been doing to correct their own mistakes and become more efficient regulatory entities. So free financial markets can not be exactly "free" -for a while- as long as the global financial environment as full of problems as nowdays. This is the right time for the above mentioned initiatives; government and every institution who cooperates with them has to horse citizens increasing interest and concern about financial questions and news. Citizens worldwide paying unprecedented attention to financial news; they are trying to be more informed and what is new, there are much more

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people who want to understand the process in the background and can not be convinced as easily as before by financial consultants and by bankers. Those who are responsible for financial culture’s development (government, financial suppliers and the education) must not waste any more time; because of continuous scandals, the credit crunch and huge financial loss people have lost their confidence in the financial sphere’s participants and their agents (brokers, bankers, financial consultants and so on). “For example the authenticity of the NBH’s Executive Board has fallen sharply from December, 2008 till February, 2009. People consider free economic analysts more genuine source of information; they believe more their opinion in financial-economical questions. This increasing mistrust inclines people to know better economic processes. Although in general the average Hungarian do not pass more time than a football mach in a year to look up financial processes, in the last two or three month there can be experienced positive signs regarding to this. According to Szonda Ipsos’s survey, six tenth of respondents pay more attention to the safety of their savings in current situation. Personally I think it is still slight compared to the gravity of the financial-economical situation, but the moral is more adequate for the government and it’s collaborates to increase attention and to substantiate the next generation’s financial literacy (hoping that current crisis can be a bad example for them and their parents). Benchmarking the data of the survey took in February against the same that had been taken in 2008, December, the proportion of respondents who fear from the national bankruptcy (four tenth of all the respondents) is increasing, but according to three tenth of them huge Hungarian banks bankruptcy is conceivable. These respondents follow the events and news in line with the crisis intensively; their opinion varies according to these factors. The proportion of those who thought that national and banking bankruptcy avalanche could occur has been as high as today only at the unfold of the financial crisis in October, 2008. Currently there are increasingly more people who think that the financial crisis is an evident reality; 85% of the respondents think that this phenomenon affects them personally. It follows that Hungarian people are more concerned about financial questions, they are becoming more informed, because they fear from the negative effects of the financial and economical crisis. In view of the above mentioned there are notably more people that have mentioned as possible personal effects the reduction/moderation or directly the deferment of spending. According to this data significant decline in citizens’ consumption can be expected. 57


Additionally the proportion has increased sharply till February, 2009 of those respondents who believe that real estates and investments are losing value, those who use their savings to cover their expenses, and those who are sure that they will not be able to pay their redemption.” 27 However Hungarians regulated themselves a little bit in the crisis; their incline to borrow has decreased, but it can be regarded to the more sever credit conditions too which financial institutions had to present in this hard times. In November, 2008 households’ borrowing have been increased by 10%, while corporations’ incline to borrow was stagnating. In the last three month households’ borrowing checked which signed that Hungarians felt the crisis. On the contrary of borrowing thanks to double-digit deposit interest rates, the number of households’ deposit has increase, which means that all of those who have some saving are trying to exploit the occasion. Unfortunately many clients debus with huge loss from investment founds (still the reason is the lack of information and knowledge) and in contrast to the whole credit expense indicator clients focus on the sum of redemption. And at the end; however the Hungarian Financial Supervisory Authority is warming consumers from many years that yen based credits are very risky, because of the exchange-rate’s fluctuation, but 1% of Hungarians are indebted in yen. Concluding this part the necessity of financial education can not be queried. Hungarians have too many loans compared to their salary’s level and as it follows there has been numerous credit crunches in the past period. Hungarian consumers without sufficient financial knowledge decide by virtue of their emotions so they can be strongly influenced by the alluring advertisements and offers. So the government following the commendation of the European Union and the OECD arm-in-arm with the bank sector and the education system has to make serious steps to safeguard the economic and social system’s balance and assure it even for the next generation. The financial culture’s development can not be executed from one day to an other; it is a longer process. So if we want to guarantee a safer and financially more conscious adulthood for current school-age children steps have to be taken now.

27

Szonda Ipsos: A válság már kézzel fogható valóság, Thursday 19 March, 2009, 3:25pm:

http://gazdasag.ma.hu/tart/cikk/c/0/40542/1/gazdasag/Szonda_Ipsos_A_valsag_mar_kezzelfoghato_valosag, 19.03.2009, 16:41

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I would like to quote Júlia Király, the vice-president of the NBH’s words regarding to the financial culture: “Even though somebody knows perfectly the sophisticated markets’ structured products it does not mean that he or she can perform the most responsible behaviour on the given financial market. I think that financial culture has to contain supportive, management and ethical norms and other requirements which will force out the creation of a responsible financial intermediary system and infrastructure to decrease the next crisis’ negative effects.”28

III.2. Financial illiteracy in Hungary and the possible solutions according to the education’s, the financial sphere’s and the state’s angel The Hungarian population’s financial culture has to be examined from three angels. There is need to know the point of view of education and its participants (schools, teachers, and students) about the financial culture, do they consider it sufficient and if they do not what can they do to develop it? Then the financial institution’s aspect is as much important as the previous one. I have already explained that sufficient and equilibrate financial system can not be realized without financially literate population which is interested in financial, economical, banking and investment issues, which consist of conscious consumers of financial products; consumers who care about their future and do not select account executive bank by right of the nice protagonists of the advertisement. Naturally the financial institutions are basically profit oriented corporations, so the state has to realize a precise and sever legislative background, because there can be always some “bad apples”, namely some financial institutions wanting to turn to profit clients laymen attitude. There are many negative examples for financial institution’s renitent comportment. Thanks to the financial and economical crisis the Hungarian government dedicates more attention to the financial system’s regulation and the Hungarian Competition Authority has been investigating many cases and levying huge fines. In the following I will present separately each factor, but before this I would like to settle my point of view; reading to Mr. Péter Felcsúti’s speech which he made on the

28

The Infórádió’s interview with Júlia Király, the National Bank of Hungary’s president

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Financial Culture Conference in Budapest, 2 October, 2008 I think he considers financial literacy’s development the state’s and the government’s responsibility; they have to manage it through the education system. According to my point of view this issue is not so simple and inasmuch especially requires a serious concordance and cooperation between the institutions of the government and the competition sphere it can not be considered only the states responsibility. To my mind the state has to create the legislative background, and has to control whether the participants follow the regulations and respect the rights of clients. Moreover, I agree that the state (to maintain investors’ confidence and balance the possible fiscal unsteadiness) has to help consumers and financial institutions in case of need by lowering the financial burden on their shoulders. Nevertheless I agree that financial education has to begin in the early childhood to make young adults familiar with financial issues, so when in the future they have to deal with serious financial decisions the probability to make a wrong decision can be decreased.

III.2.1. The education’s aspect regarding to the Hungarian population’s financial literacy I would like to begin with the education’s role regarding to the financial literacy. In this topic I have my own experiences naturally, but I’m going to use an interview too which I made with a prominent high school’s mathematics teacher and I’m going to present financial literacy’s level of school-age children accordingly the National Bank of Hungary’s representative and authentic survey made in 2006. Inasmuch as Hungary is the member state of the OECD and the European Union and exactly because of very concentrated financial markets the financial culture’s issue can not be considered and discussed in only Hungarian regard. Anyway financial education is above all a competence of the Member States, so even Hungary had to work out its national strategy on the financial education taking into account the OECD’s and the EU’s recommendations. Even though the majority of young adults consider important, in the every day life, they are not so interested about the financial knowledge. The reason for this is the difficult financial language and their lack of financial concept. 14-17 years old children do 60


not know the difference between the bank of issue and commercial banks, 18-30 years old young adults perform better in this field. Furthermore the “PSZÁF” abbreviation is nearly unknown by children and regarding to young adults its rule is not clear. Children and young adults are totally uncertain to which authority can they turn to in case of any inconveniences. Characteristically they do not know the deposit protection and the National Deposit Protection Found (Országos Betétbiztosítási Alap) concepts. Additional risks lays in the lack of knowledge about BAR/KHR system, as it follows they do not know how cold they end up on the list. Either children neither young adults do not understand certain information related to financial services and they do not have confidence in the source of the information as well, but what is interesting, they consider the security and the reliability the most important characteristic of banks. Young adults are passive when they have to select and use money circulation services. They accept the account executive bank chose or offered by their parents or by their employers. Especially the 14-17 years old age-group thinks that they do not have sufficient information about financial products and services. There are few ones who really compare banks’ offers and conditions and in the possession of the information they decide which service is the most adequate for them. Concerning information most of them gather it about financial services from the television, from newspapers and magazines. The two examined groups can be considered the most informed about debit cards, these are the most prevalent financial products. The reason for is their personal experience about plastic cards (65% possess it or use it) because the older age-group usually use them. Those who do not want to use it explain their choice with concerns about debit card payment security. Both of the age groups are only interested in the fluent usage of resorted financial services, they do not interested in other issues when they choose bank, neither they are interested in the chosen bank’s expansion nor it’s past. Most of them fear from theft or from falsification of their card as the result of their acquaintances’, their family’s and the media’s negatively influence. Regarding to various types of plastic cards both age groups is uncertain about the differences between them. Young adults have two main attitudes about credits; one part of them is absolutely dismissive concerning borrowing, but the other part can not imagine their life without credit. Generally only those have knowledge about credits that have already had it however the younger age-group confessed that they are lack of knowledge about credits and the older 61


age-group considered its knowledge mediocre too. But even in this ultimately mentioned group there are few ones who can realistically justify credits’ risk. The student-credit is known by every age-group, but even those who possess it do not know much about its risks. Concerning the risks of Forint and foreign currency based credits 35% of young adults do not have enough information to diversify them. 20% of the both age-groups can not justify the financial alteration’s effects on the redemption of foreign currency credits. Those 18-30 years old persons who have signed a credit contract did not dedicate time to examine accurately banks’ offers and their comparison. This type of clients based their decision on the most basal characteristics of the product (foreign currency type, duration, THM). Examining people knowledge about credits it has been find out that the three most known concepts are the monthly redemption, mortgage loan, and duration. It is important to emphasize that both agegroup is lack of knowledge about basal concepts of foreign currency based credits which can cause serious problems or directly renders impossible the comprehension of this type of credit conditions. Young adults have the least knowledge about self-reliance and pension pre-saving. This issue is very alien from them, even from those that have already had to select one because of their labor relation. The reason for their disinterest is the unforeseeably long period till their retirement. They think that the pension system can change during this period and so do its unpredictability. That is why they feel unnecessarily to plan on the long-run. The number of those who joined a private-pension found is very low; only the 75% of older age-group joined it promptly after the beginning of their labor relationship. The high percentage of those who have not joined any private-pension found and did not know about their pension-found selection obligation either during the summer work aggravate the situation. They do not know which kind of pension found can be chosen and which is obligatory. When they select and join one, their interest remains low; two third of privatepension found members do not follow the information and news provided their pension found institution. Because of the above presented negative results of the young generation’s financial literacy the National Bank of Hungary has organized several conferences, teacher’s seminars and round table discussions on financial education since 2005. The Cooperation Forum (which incorporated high-school teachers, different organizations - GOs and NGOs - , and the media) on financial education has launched an extensive lobby activity in order to achieve 62


that at the 2007 revision of the content of the National School Curricula financial and economic competencies has been included. Resulting from the rather liberal school system this means that in the following 3-7 years finance will be taught in most high-schools, but where, when and how it’ll be incorporated to the local curricula depends totally on individual institutions. Because of this I decided to make and interview of a mathematics teacher of a prominent high-school in Pécs where the mathematics education has already won many national awards. Among other things I asked about her experience concerning students’ financial knowledge, her opinion about financial literacy and her strategy to combat for a financially more conscious young generation. Betty Ritter has been teaching mathematics since 1986, currently she is teaching in the Cistercian Order’s “Nagy Lajos” High School of Pécs (Ciszterci Rend “Nagy Lajos” Gimnáziuma). I frequented this school and exactly she was my mathematics teacher, so I have my personal experiences about her teaching methods. When I decided to write about financial culture she and her lessons have been the first things came into my mind. I remember too that she dedicated a whole lesson to drive our attention to financial institutions’ advertisement traps. I was interested in whether she has invented new teaching methods or a new curriculum regarding financial issues. When we made the interview she told me, that compound interest exercises have been always the part of her curricula. She sees the same problem that the survey of the National Bank of Hungary’s presents. According to her point of view students’ are lacks of adequate financial knowledge. They do not know basal concepts, there is need to explain them nearly everything if it comes to that. She thinks that students ability can be developed by this way so they can see more transparent financial process and they can understand easer and faster the important financial issues. Ms. Ritter is still warning her students that financial institutions can use alluring advertisement and their agents various type of convincing tactics to make business. According to this when those, who currently frequent her lessons will become consumers of financial products probably, will examine contracts more precise before they resort any financial service. She thinks that better mathematical competences can help students to find their way in the world of numbers. I agree with her regarding to the utility of better mathematic competences, but I think excellent competences can not be expected from everybody. Even those students’ attention have to be piqued, regarding to the hazards and traps, who do not like this subject and as it 63


follows do not have excellent results. Ms. Ritter said (and I can confirm this) that she usually brings flyers and newspaper advertisements to the lessons to analyze it with students, calculate with the given data and show them where they can meet with risks. Children usually pay more attention to different, interesting issues where they can have the floor. Issues which merit more attention or have to be seen deeper and more detailed it is worth to discuss about it, ask children opinion, there point of view, ask about their personal experiences and so on. The essence is to make them thinking, leave a trace in their head about the issue, so when they leave the school they do not leave the gained knowledge as well. If they can speak out what is on their mind about financial products topic, they probably will be more interested the issue. This is useful for teachers too, because by asking students about their point of view they can collect sufficient feedbacks to know whether children understand or not the issue, whether there are any questions or any details to clear. Currently Ms. Ritter interrogates and makes tests for students about the discussed issues giving marks to them according to their knowledge. According to her opinion it can be seen that Ms. Ritter is not satisfied with financial knowledge in general. She thinks that the financial knowledge development is the equal task of the state, the competition sphere and the education system. My opinion is that the education can do more than it is doing with its current efforts. There are good initiatives from the competition sphere and from the state, but there are no legal obligations from the government’s side to render financial education more effective. I think it is not enough to have some initial points or approximately formulated principals concerning financial education in National School Curricula. This issue can not be discussed oscular; there is need for a financial education curriculum incorporated in the national one which lays down precisely how teachers should build up financial education from the early childhood (elementary schools) till the high school graduation. The educational methods have to be conformed to students’ age, for example in the elementary school there needs to begin it hand over fists. The problem with the current principals that they give too much free hand to schools and teachers deciding about financial education built up. I was 18 years old, I was to finish high school when Ms. Ritter made this only one lesson about financial concepts and banking traps. It is absolutely not enough. As se said even though she knows about financial competitions organized and supported by government authorities and the National Bank of Hungary she did not want to take part in them. 64


As I said those teachers who have time, interested students and especially those who vindicate more accurate financial education can choose a wide range of programs. In order to achieve main strategic objectives of the NBH (achieving and maintaining price stability, encouraging sophisticated means of payment, supporting financial stability etc.), there is need either the professional community’s and neither the wider public’s contribution. Therefore, the management of the central bank launched an independent financial literacy project in October 2007, in order to reinforce and integrate all the activities aimed at developing financial literacy and create and implement long-term integrated programs: ¾

The content of the information leaflet (“Money speaks – do you understand it?”) was updated in 2008 and not only the pupils in their final year but, one year younger students has also received it, enabling the teachers to find more time and possibility to discuss the topic.

¾

The NBH organized seminars for teachers to support and to encourage them calling student’s attention to leaflet’s topics and talks them about it in a class.

¾

The NBH established the Foundation for Financial Awareness. Student Loan Centre and Hungarian Banking Association are the other founder members of the foundation. The Hungarian Financial Supervisory Authority and Hungarian Competition Authority actively participate in the activity of the foundation within the framework of Memorandum of Understanding.

¾

The NBH provided professional and financial contribution to the financial educational program of Self Care Foundation. Foundation established by Budapest Stock Exchange coordinates development of internet-based educational program for secondary school students and teachers. The program is available free for everybody on the website http://www.penziskola.hu/.

¾

The NBH organized a monetary competition for high-school children in 2005 with the aim of promoting itself and its tasks among children aged 15-17.

¾

The NBH’s Visitor Centre (VC) opened its visitor in March 2004, with the aim of introducing the basic concepts regarding money and money history (including coin & bank note collection), promoting the main tasks and history of the NBH, providing knowledge on monetary policy and price stability, enhancing financial literacy, as well as improving the credibility and image of the bank.

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Regarding to higher educational level university students can take part in the “Felkai András Scholarship” announced in at least once a year to support young talents of the financial field. The importance of good financial education has been acknowledged at the global and EU level, including in the White Paper on Financial Services Policy (2005-2010), the May 2007 Green Paper on Retail Financial Services, and the European Parliament resolution on financial services policy, adopted in July 2007. The issue of financial education was also raised in the ECOFIN Council conclusions of 8 May 2007. Financial education has been announced in the Commission's report on a Single Market for 21st Century Europe providing assets for citizens to make them understand some essential basics of personal finance. The EU has developed a number of activities in the area of financial education, and it is playing supporter role to stakeholders. The Article 153 of the Treaty provides that the Community shall contribute to promoting the right to information and education of consumers to safeguard their interests and adopt measures which support, supplement and monitor the policy pursued by the Member States in this field. The Commission has already taken some initial steps to address financial education. It has set up a website, Dolceta, offering consumer education to adults. One of the modules of this site is dedicated to financial services, with subjects including budgeting, consumer credit and home loans, means of payment and investments. Another initiative is the ‘Europa Diary, a booklet distributed to second-level students which includes a section on money and debt, which explains how financial institutions and products work, and gives early warning about the dangers of excessive borrowing. The European Union provided eight principles from those four regards to the financial culture’s development by educational system. The First Principle suggests that financial education should be available and promoted at all stages of life continuosly, while the Second Principle drive attention to carefully targeted education programs to meet the specific needs of citizens. The Third Principle settles the earliest beginning of economic and financial education of schools. The last principle regarding to education system is the Sixth Principle which declares that financial education trainers should be given the resources and appropriate training so as to be able to deliver financial education programs successfully and confidently.

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III.2.2. The financial institutions’ aspect; financial culture’s development and consumer’s confidence “Trust is the principle of social life, because social relations become impossible in a world where we can not trust anyone. We need reliable and calculable environment to live our life rational, so we expect from the world and from people living in it to be reliable.” – Tom Marshall: Trust –

It is impossible to present all the programs provided by the financial sector to develop citizens’ financial culture, but it is not my scope either. I would like to present why financial culture’s development is an ambiguous issue. I say that financial culture’s development has limits from the financial sphere’s aspect. Why? Because it is not enough to develop financial literacy and render consumers more informed and the financial market more sophisticated. Financial institutions need consumers’ confidence. Consumers are human beings who decide and will decide by right of their emotions whatever level of financial literacy will they achieve. Very probably population will never achieve the excellent level of financial knowledge. Very probably they will not be able to compare all the offers of the money market and very probably the crisis what we live today will not be the last one in the Earth’s history. At the same time trust can render many situations easier and it can reduce the negative financial effects of a further crisis. If people have confidence within an institution or within a corporation they would panic more difficult in case of a financially difficult situation. For example they do no begin withdraw their money en mass from the financial institutions deposits, real estate founds and from other assets creating huge financial loss for themselves and for the institution as well. The biggest problem with consumer panic is more they fear and faster they withdraw their money invested, the easier goes bankrupt the financial institution in question rendering weaker the financial system. If the financial system becomes weaker (or it seems weaker than before) foreign investors loose their confidence, do not invest or what is worst they begin to withdraw money from the economy. Hungary which has very opened market economy extremely depends on foreign investors’ money and as it follow depends on their confidence. 67


“The Aviva Life Assurance Company made a survey in 2008 to examine Hungarian and even foreign consumers’ confidence in financial services and in the sector itself. The survey cleared up that Hungarian population’s 60% would think that information provided about saving and investment facilities are not lack of distortions. Similar to the European tendency, confidence in financial suppliers does not rise in Hungary either. People want to have understandable information and really useful information from financial institution’s agents. But things have adopted a different course; financial products have becoming more complex and documentation more difficult and long.

The majority of

customers can not decide whether financial institutions find them with down-to-earth offers and furthermore they consider them more concerned about their own needs and the profit creation for their owners than their clients’ interest. The “greatest” confidence girdles the local and regional banks; Hungarian consumers’ 28% and in the international context consumers’ 43% voted for them. Only 22% of Hungarian consumers are found of gross international banks operating in Hungary while in total it showed 37% including foreign respondents too. The same tendency can be seen regarding to insurance companies; Hungarians’ 18% trust them in contrast to the international 31% proportion. The proportion of those who expect state reliance is only 9%, in international context it is 26%. When consumers resort financial services they usually take informal advices; approximately 70% of consumers accept family members and friends advice. (This reflects as well how important is for financial institutions to build up confidence again!) One third of Hungarian consumers decide in virtue of references, one third recline upon previous personal experiences. 20% of Hungarians consider very important that the given service has to have a long run back on the market, 10% appreciate well-known markets and for only 3% is important the experts offer.”29 These are very important data and the financial sphere has to take it into consideration if they want to find out a business strategy which is going to work even on the long run and which is going to guide out the sector from the crisis. Accordingly the competition sphere and 29

Pálmai Petra, 4 September, 2008: A nemzetközi átlagnál bizalmatlanabbak vagyunk a pénzügyi

szolgáltatókkal szemben, http://oreganeniked.hu/news/1300/befektetesek:_a_nemzetkozi_atlagnal_bizalmatlanabbak_vagyunk_a_penzugy i_szolgaltatokkal_szemben__, 07.04.2009, 18:43

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more precisely the financial sector is beginning to recognize the importance of the financial education and fortification of consumers’ confidence too. In the following section I am going to present the aspect of important representatives’ of the financial sector, how do they see it and what do they think about their role in the financial education and the boost of confidence. First of all I would like to quote Mr. Péter Felcsúti’s words said on the Financial Culture Conference who is the President of the Hungarian Banking Association, so I think his point of view well characterize the whole sectors’ aspect. “It is evident for me that the Hungarian banking sector has well definitive, enumerative business interest to develop financial culture. By this I mean for example to switch financially inactive groups into those who resort financial services. Furthermore, I mean to expand the financially already active groups’ banking habits to make then acquire more products then the currently used which corresponds without doubt the sector’s interest. According to my opinion this angel will be emphasized more in the future within the banking sectors priorities, because the last decade’s typically fast and basically extensive development period is coming to its end. I think there is need to increase household’s financial activity and the banking sector is concerned as well to search the cooperation with government authorities to realize project which render easier and more comfortable cash in and payment to governmental and municipal authorities. We are concerned to cooperate with the bank of issue (dividing costs fairly) to innovate payment systems and to roll back payments bay cash which contributes to the economy’s more effective operation and through this the development of competitiveness. At the end we are concerned to support educational programs which aim the development of financial culture; for this reason we have joined the foundation created by the bank of issue. The initiatives’ other part is a follower type, I mean that the bank sector whether likes or does not like has to accept the government entities’ and other authorities’ guidance in consumer protection and competition law questions like customer orientation or contacts supervision.”30 Mr. Felcsúti was absolutely right emphasizing the importance of the financial sectors participation in the development of Hungarian citizens financial culture, but what is really sympathetic for me in the above mentioned that he admitted the banking sectors responsibility (even if he sees it more narrow than me). This is not a surprise, because

30

Quotation from Felcsúti Péter’s speech made on the Financial Culture Conference, 02.10.2008

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financial institution’s CEOs have their hands laced after a certain point, because within every circumstance, they must not forget about shareholders’ and the business owners’ profit orientation. So because of different scope of different owners of the business there can be different point of views how should the financial institution manage its clients’ financial literacy development issue. The issue is complex and ambiguous within the institution itself too. It was very interesting to hear what does one of the oldest and most prominent Hungarian corporation’s business branch executive think about financial culture’s development and their task about it. I talked with Dr. Krutki Józsefné who has executive function within the Hungarian Post’s frame. This is an actual issue for them because the Hungarian Post will enroll among financial institutions. According to this it will have the responsibilities and obligations which a financial institution has; it will become a financial supplier with its own financial products and services to offer and as it follow they will have to care about sufficient information, responsible and customer oriented attitude. To find the best practice, to understand better what do consumers need and where can they find a market gap there is need for them to examine Hungarian customers’ financial habits. Nevertheless the Hungarian Post will be the latest and the newest financial supplier within the already existing one in 2010 it has advantage that the others do not have; it is Hungarian people’s confidence. Consumers trust in the Hungarian Post’s services, they consider it more transparent, they think that the “Post” has always cared about them; they do not think that it will delude them in the future. “[The financial culture’s development] is increasingly appears in corporations’ philosophy and so does in the Hungarian Post’s as well. It is very interesting to see how they build up it. The Hungarian Post is a hundred years old corporation, in its character traditions are dominating. It is trying to broadcast the message to clients “I was here yesterday and I will be here tomorrow as well” and “I am the stability, I am the security”. Naturally it does not mean that the Hungarian Post is modern; it suggests more that “you can trust in me” which is in the current financial situation means a lot.” I think neither they can recognize what kind of vantage-point do they have compared to other, currently existing financial institutions; Hungarian people do not trust in financial institutions in general, but they do in the Post. According to a survey made by the Gfk in 2008, confidence of the population in post men (90% of respondents) was nearly as high as confidence in firemen (95%). While people were increasingly loosing their confidence in the 70


financial sectors’ participants in line with the crisis (only 48% of the society trusts them), the Post had been able to maintain its confidence level within the Hungarian society, and moreover it could strengthen it. Nothing shows it better than the following: “I want to give an example to show how strong is the confidence in the Hungarian Post (and how low is the financial culture in Hungary); the Hungarian Post deals with real estate founds of the Erste Bank. We have a really huge substance, which puts out HUF 25 billion. Now when the financial crisis’ first wave achieved us and consumers began to put out their money from every kind of real estate founds so founds have been blocked, it could be seen how much money flew out from the OTP founds, how much from the Erste and how much from the Post. The highest flew out could be experienced from the OTP, but in the relation of the Post and the Erste, from the Erste there were approximately two times more flow outs than from the Post. What does it mean? (…) Even though real estate founds became very bad papers, every tenth clients put out their money and I can give two explanation for that; or they do not know how does these papers work (which is a huge risk for them) or they simply do not want to look after how do these founds work, because they think that it is the Hungarian Post’s product, the Post is eternal and in the Post they can trust, they do not think that the Post is only a distributor of this product. They say, the Post has never ever deluded them, from the Post they have always received what had been promised to them, the Post will be here even tomorrow and this is the paternalism which maintains the attitude in them that they can entitle the Post with their money and after… it will be somehow.” In so far the Hungarian Post has not received its name for developing Hungarians financial culture however makes more than financial institutions. The Hungarian Post in its every segment is keen on to maintain the paternalist angel of consumer; it has a subsidiary, namely the Hungarian Post Insurance Company which offers unit-linked insurance. When they are publicizing the subsidiaries products, the advertisements are built upon the same paternalist, easily accessible, transparent and reliable characteristic which girdle the Post. Dr. Krutki Józsefné acknowledged that the Hungarian Post has to find its place in the financial culture’s development and as it follow its interest in it. The main problem is that Post’s currently can not drive clients’ attention to the financial culture’s development, because it would mean that they have to explain how do real estate founds really work and furthermore it should campaign for the increasing use of banc accounts and debit cards. “Annually 4 thousand billion Forints flow through the Hungarian Post in form of 71


cash because of the huge cheque circulation. (…) At the moment the Hungarian Post is concerned to maintain this huge sum of money. So, we are not concerned to post up our cash payment services into banking services within a short time, because we gain the major part of our profit from this. The Hungarian Post has monopole situation in the previously mentioned, because the state entrusted it with rights to manage cheque circulation in this gross amount. (…) So, we will not help to post up the client culture from the cash payment into the more modern banking culture, since our partial interests, since our competences do not shape in a way that we can practice banking services. This facility will be realized till 2010, but I would like to add that it will come along with high risks too. From that point the Hungarian Post will find itself in competition situation. Because there are thirty banks and the Hungarian Post will enroll on the thirty-one’s place and it will have to share clients with the others. But the Hungarian Post has an important advantage; bankers do not want low income. It doesn’t matter, because the Hungarian Post wants them, because the Post won’t be bank, but a financial institution, so it doesn’t collect deposits, but grant payments and distributes credits. The Hungarian Post will become a basic account executive, so if the state orders, it will be able to grant subsidies and pensions which don’t come along with huge risks. Anyway we do not have monopoles and promises regarding to it, so the Hungarian Post’s social responsibility concerning the development of the financial culture will unfold when the previously mentioned business interests can really be built up.” That is why I say the social responsibility regarding to the development of the financial culture is limited. Dr. Krutki Józsefné told me that the Post’s POS service on the mobile posts can be considered a CSR step for a better business culture, because people have more access to their money on their bank account, so it is more likely that they open one. Or the Hungarian Post’s participation in the “E-Magyarország” program, namely they offered to the state to install its network on their cables can be considered a nice and generous step, but its principal aim was not the financial literacy’s development. Dr. Krutki Józsefné told me that according to her opinion the financial culture’s development would has to begin with the modification of the tax system which has to leave more money into the population’s hand. The financial culture do not help to filtrate black money from the economy, because till people have to pay the major part of their money for taxes they will always find the way to do not declare their real income, they will prefer not using modern

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banking facilities than to be cached with fraud. Till this situation will not change the Post has to foster clients trust and it will be able to maintain its position. Regarding to consumer satisfaction, confidence and generally occurring problems I asked Mr. Béla Cserepes, who is a free-lance financial consultant. He has much experience with various types of banks and clients with various financial claims. During his work he is the agent who has to face with clients’ difficulties, he is the agent who has to explain the financial concepts and conditions to clients and if any problem occurs he is among the first two participants who clients blame. Mr. Cserepes told me that he considers really low the financial culture in Hungary. So, that is why when consumers try to find a financial facility to realize their project “clients go to a bank, for example with a finance claim, where they immediately lavish with a lot of information reflecting that there is no better alternative in the world than the offer of the bank, that type of credit facility has been invented for him and so forth. This can absolutely understandable from the bank’s side, but regarding to the client’s it can be very risky and it can affect him adversely, because of the lack of sophisticated financial knowledge he can be easily deceived. Risks and problems can be realized in the various expenses; redemption, interest rate, handling fee or in case of extraordinary redemption. All this can be avoided by the requisition of a free-lance agent’s help. Furthermore, the various financial suppliers’ ambition to make clients wait less, to get run to everybody as fast as possible (because the next client has already been waiting and they want to solve their case as fast as possible) is adversely for clients.” I think if the agent is well prepared, well qualified and be able to make a regular and intimate relationship with consumers it can be one of the most successful way to make citizens know financial products and to rebuild their lost confidence. “Those clients who come to know the advantages of the free-lance agent, his or her work and methods will twit more to him or her than to the financial institutions. Consumers can make decision after comparing more financial products (what he or she does not do in general, because it would be very difficult, and let me add an other note to this; clients do not compare offers because it will be fatiguing and really slow to visit every bank in the city and compare the offers) and the confidence can not be queried because the agent is always at the clients service, their contact is human and informal. Moreover in many cases clients recommend the agent to their 73


family and friends which is the sign of trust. This is the personal contact which the financial institutions lack, that is why they can not create as fiduciary relationship between clients and administrators as the free-lance agent can.” Unfortunately there are many bad apples and there could be experienced many scandals even with free-lance agents. It is difficult to gain clients trust, but if it can be achieved free-lanced agents can do a lot for financial culture, for modern financial products utilization, but what is important that they can not be violent and adamant, they must not follow the faulty example of many financial institution’s agents who seems that only concerned about to sell and put the bonus in pocket. Free-lance agents have to become a kind of financial tutors for adult clients, explain them their options, translate them the financial language what laymen can not understand. If the agents succeed to stay by the clients side on the long-run they will be able to see more transparent the clients financial situation and they will be familiar with their financial history, so they can offer the best solution for the consumers which will be beneficiary either clients neither the financial sector (and for the agent too).

III.2.3. One bad apple which has stirred up the still water Inasmuch as we talk about the financial sector’s social responsibility to develop citizens’ financial literacy and to foster confidence within the financial sector and its activity there is need to say some words about a current scandal which justifies the necessity of all the above mentioned. In the previous months the media has been full of scandalous news about the Provident Financial Zrt.’s activity. The UK based credit institution which began its activity in Hungary in 2001 is providing fast personal finance for consumers. The institution grants credit between HUF 30.000 – 200.000 for 26, 40 or 54 week of duration without obligating the debtor to provide cover or bail. The agent searches the interested client at home and if the client is found creditworthy, the requested sum can be received by remittance within 15 days or by cash even in the same day. The Provident emphasizes that their credits are free from exchange rate and interest rate risk that is why they assure fix redemption during the duration. The client can pay the redemption by cash at home or if the credit has arrived to bank account, 74


debtor can pay by remittance as well. If the redemption is paid by remittance, the creditor offers lower THM (total credit expense indicator- I’m going to abbreviate it to TCEI) rate. And now we are at the point where the problems have begun. After increasing number of reclaiming clients, the public and consumer protectionists begin to protest against too high TCEI rate. Practically, debtors could be obligated to pay 405% of THM for the requested credit. It means that during the maximum 1 year long duration clients had to repay approximately two times more than the sum requested. The institution justified its high interest rate with the extremely fast granting and the easier credit conditions which go along with higher risks for the institution. The Provident’s justification can be accepted, because this is the way the institution equilibrates its risks. But when they do not give adequate information about the high expenses to clients and they only emphasize the commodity and the promptness of their services, those who are seriously in need and do not understand perfectly financial issues can be deluded and can find themselves in a serious financial situation. The problem occurred by the Provident’s activity is really complex; it reflects perfectly the increasing competition among financial institutions (because they had to exceed their previous year’s profit), their increasing fight for additional clients and the extremely low financial culture in Hungary which is impacted seriously by the negative effects of the “consumer society”. The “Provident Scandal” received high publicity in the previous months, fostered the implementation of the usury law and called up attention to alluring advertisement tactics. Because every step towards consumer protection from fast personal finance is already in progress and the end is very far with adequate solution (if it will have an end with any kind of solution), I’m not able to justify it objectively. I tried to see the background, I have read news published on the Internet and I have visited continuosly forums created by the Provident’s clients where they shared their personal experiences. According to my personal opinion people fall in their own trap by the support of an only profit oriented institution. The Provident willy-nilly used a kind of “Hungarian Posttactic”; a simpatico, well-known agent brings cash to clients’ home (as the well-known postman brings money to many households), clients have to only pick up the phone and make a request. It is safe, simple and comfortable, in the advertisement everybody is happy, there is a new microwave oven and the grandparents can buy new toys for their grandchildren. But I would like to ask some questions; if an average family does not have money for a new 75


microwave oven or the grandparents do not have budget for the twentieth new toy for children in a certain month how can they assure a credit institution that they will have two times more sum to pay for the redemption in the future? Or if they will have it why should they indebt themselves because of a product which is not a basic necessary for their everyday life? Obviously everybody decide about his or her budget, but this is exactly what the education system has to make learn to children (and to many adults as well); maybe you cannot have everything that you want at the same time, you have to make sacrifices to realize your dreams, sometimes you have to work hard and if you need additional financial support you have to calculate extremely precise and you must not ever get engaged with a financial obligation which you probably will not be able to fulfill! I think the state should control more sever financial institution’s activity and bound any step which exhorts consumers to irresponsible consumer attitude. Unfortunately the current picture reflects the contrary. Clients of the Provident usually tell the same on the forums; they did not receive adequate information, they could not pay the redemption after a while, then they received luring calls from the institution’s agents. When they were absolutely not able to pay a cent these calls fell away after a while and as conclusion everybody added that they do not offer to anyone to ask for a Provident credit. There are others, who were able to pay, but they had bad experiences with the administration; even if they had paid all the redemption, they were still registered as debtors. Obviously, I cannot justify how much they are exaggerated but the too many reclaims makes thinking… On the other hand in some articles published on the Internet ex-agents of the Provident confirms the reclaiming clients’ statements; they told that they have been fostered to make as many contracts as possible, usually they knew that the employment certifications presented by clients did not show the real picture about their labor relationship, but even so they have granted the credit for them. This is the example for irresponsible granting which the legal background should absolutely prohibit. After all of the happenings have been mentioned, maybe we can think that the Provident Financial can put up the shatter, but it if think it will be the contrary. Negative PR is PR anyway, as negative advertisement is advertisement which calls up the public’s attention to the institution’s existence. When the Antiprovident group organized assembly in front of the Provident Financial’s hall, the represented Provident marketing manager heart out the public and after he could presented a new service package, where the TCEI is only 90%, but 76


obviously with more sever credit conditions. The day after the media published the whole act with the new offer (advertisement?) accompanied by the marketing manager’s convincible smart face, so those who did not want to ask for Provident credit because of high expenses, maybe have been convinced that all the barriers had been eliminated from them. Additionally, the Provident is making huge efforts to create the “financial culture’s developer” picture about itself, by making spots in the television and publishing steps made towards a financially more literate Hungarian population on their homepage. With all this, I think we are again behind the eight ball.

III.2.4. The Hungarian government’s role regarding to financial culture The state has serious role in the development of the financial culture. It has to realize its task through the education and the legal system following the direction showed by the international organizations’ of which Hungary is member state. I have already wrote about the education’s role now I would like to present the current steps from the state’s side which contributes to the development of the financial culture and consumers protection from financially derogatory decisions. The European Union and the OECD recognized the importance of the financial culture in its member states and made numerous steps towards its development. The OECD’s Council in 2005 accepted a recommendation, while the EU’s Commission published an official statement in which both organizations drafted the principles of financial culture development. This recommendation support member states’ concerned authorities, institutions and organizations to create a long-run national strategy for the harmonized and effective financial knowledge development which will serve as the basic of high quality and effective programs realization. For the initiative of the NBH and with the support of governmental, professional and civil organizations the Foundation for Financial Awareness has been created in September, 2008 which principle aim is to foster the discussion between concerning parties in accordance with international recommendations. These parties signed a declaration in Budapest, 2 October, 2008 and obligated themselves to develop financial culture. The following parties signed the declaration; OECD, GVH, NBH, PSZÁF, Ministry of Finance, Budapest Stock Exchange, Student Loan Center, The Hungarian Association of Investment Found and 77


Fortune Managers, Investment Suppliers Association, Hungarian Bank Association, Hungarian Insurance Companies Association, Hungarian Leasing Association, Stability Money Association, Lajos Faluvégi Foundation, Junior Achievement Hungary, CentralEuropean Broker Formative Foundation, Self-Reliance Foundation, Financial Awareness Foundation, University of Pécs Faculty of Economy and the National Consumer Protection Association. On the Financial Awareness Conference the ex-prime minister Ferenc Gyurcsány acknowledged too that financial awareness is the basic element of a stabile and competitive Hungarian economy. When the crises was unfolded and it became clear that many Hungarians will not be able to pay the redemption of their foreign currency credit, János Veres Minister of Finance declared with Péter Felcsúti that the government agreed with nine commercial banks to help above mentioned people in need. According to this banks prolong the duration without extra expenses, change foreign exchange credits to forint ones and temporary lower the redemption if clients request it. The OTP, the CIB, the Erste, the Raiffeisen, the UniCredit, the K&H, the FHB, the MKB banks and the TakarékBank signed the agreement which after has been considered completely wrong by many financial analysts and CEOs saying that steps like this will never force Hungarian consumers for a more responsible and aware banking habit. “Reacting to the today’s leading article of the Világgazdaság, I think the government makes as if we would live in a world without consequences and it would be right. I do not agree with the state help for those who have credits in foreign currency. But strange ideas do not surprise me any more, because there was no impeachment in the bank sector either, everybody is absolved of everything, it has already become a general expectation as well. But I think this neither will render things better in our country on the median run, nor on the long one. How could we expect significant changes, mending and results when we are trying to maintain every existing situation and to rescue everybody? Without making real the knowledge of consequences, creating the population’s responsibility and the adequate comportment, this country will not be able to get out from this crisis, it will only snap at one rescue package and at an other.”31 These are the words of László Szentkuti, the CEO of the Siemens Zrt.

31

Szentkuti László, 26.01.2009: Következmények nélküli világ,

http://apenzszava.blog.vg.hu/2009/01/26/kovetkezmenyek-nelkuli-vilag/, 19.02.2009, 16:19

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Máté Szabó, the Ombudsman of Citizen’s Rights investigated the financial sector in last year’s December. He reported to the government that there will be serious need to develop citizens’ financial culture, cut back immediate, high interest rate loans and usury credits and furthermore there is need to introduce the private bankruptcy’s institution. According to the report Mr. Szabó can not accept that banks’ do not consider reasonable consumer right enforcement because in some cases they give false information to banks. He emphasized that the lack of financial awareness of clients creates many problems about the understanding of banking services and their conditions. The ombudsman declared that he considers the financial literacy’s development of the education system, the financial suppliers and the state. In the report he added that for prevail honest process and legal certainty the law has to control and limit the unilateral contract modifications. Máté Szabó called up the attention to a very important and very serious article; to solve financial problems neither legal nor illegal usury credits can provide solution, they are only creating more serious problems and renders borrowers situation more without solution. He considered steps from the governmental and supervisory authorities’ side crucial to hold this kind of credits back. Thanks to initiatives like that from January, 2009 the usury law has taken affect. So, I think the state has to have the controller’s and originator’s role in the financial education. It has to provide all the facilities to the education and to the financial sector to help develop awareness and limit or eliminate those “bad apples” which are only concerned about their profit and causes harm to clients.

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Conclusion To conclude my thesis I would like to say only a few words. As I presented, in Hungary the problem of financial literacy is serious and the education system, even if it has useful assets, does not use them adequately, because teachers has too much free hand and the government only blocks in the requirements of the financial education. There is need to do a lot with the young generation’s financial education, because they will be the future’s investors and borrowers. I think the education system should receive precise and detailed directives concerning the financial education, because it is not an issue which can be let to be decided by every teacher. They are humans who can be negatively and positively prejudiced with the government and its decisions and for this reason they may deviate from the directives or do not take part in the optional competitions. It is not enough to give the possibility for students and teachers; serious and detailed steps are necessary to be made. It can be incorporated in mathematic lessons for older students or literature for elementary school children where they can analyze issues related to the real financial world, but adjusted to their age. Moreover I think the distribution of flyers is not a bad step, but knowing students’ habits they are probably finished in the dust within ten minutes. Anyway, the profound cognition of practical financial issues cannot be an option, but an obligation for everyone. The financial sector is beginning to realize the importance of the financial culture’s development. I think, if the financial sector puts more effort in the financial education of clients, the popularity of financial products would increase, because clients would understand better conditions and beneficial effects of financial services. But what I could filtrate from my interviews, financial institutions do not want to give more than a certain amount of information to clients, because they do not want to educate them too much. They „fear” from too „intelligent” clients who cannot be influenced anymore, who will be able to examine the offers on the market much more and maybe will not used the traditional ways, maybe they will not use any more the same supplier which they had chosen before. I think, financial institutions have to be convinced some way that financially more educated costumers are better clients. It can be seen that clients decide on emotional bases. They are lack of confidence, they think that the financial sector is working only for business owners own benefit, so they accept agents and financial institution employee’s opinion with difficulty and with concerns. They 80


prefer to accept the advice of those who they have already known even if they are not professionals of the financial field; family members and friends. That is way I think that personal financial advisers can have success in the future, because clients need confidence before making financial decisions. Although there is need to develop financial advisers’ judgement too, because people (who do not know usually the difference between broker and free-lance financial agent as they do not know other basic concepts) are lack of confidence in free-lance agents too. I think financial institutions have to emphasize more the importance of the personal contact; they have to build the client-agent relationship even if agents have to “take care” about more clients, but consumers must not feel that they are one from many. They have to feel themselves special, their financial “history” well-followed and their money is well-managed. I think the creation of a free-lance foundation for the development of financial literacy managed by the National Bank of Hungary would be a good solution for the financial illiteracies’ problem. Every financial institution operating in Hungary would have to transfer to this founds a certain percentage of its income annually. From this pool the NBH would be able to finance various educational programs. Obviously, it would only work if the financial education is incorporated in the school curricula. Teachers, as I have mentioned can talk about financial issues in literature, mathematics or any kind of lesson. What important is to present these issues differently and to call up students’ attention already in early childhood, so their financial literacy can be formulated early. I consider a good invention the Hungarian Post’s debit card, which is presented to foster children to save money. It is like the old saving stamps; the Hungarian Post wants to evoke this old tradition with the initiative in question. At the end, maybe it would seems a little bit morbid, but if we say that smoking is dangerous for sanity and it is written even in the lotteries that too much gambling can cause mental-hygienic problems then financial institutions have to represent the same in their advertisements. These are only layman ideas, but what is sure, that steps have to taken, because the financial literacy’s current level is indicating and will indicate serious problems.

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Appendix • Pálmai, Petra: A nemzetközi átlagnál bizalmatlanabbak vagyunk a pénzügyi szolgáltatókkal szemben, 4 September, 2008, http://www.oreganeniked.hu/?node=news&id=1300, 07.04.2009, 6:43pm • Az EU lépéseket tesz a bankszektor iránti bizalom helyreállítására, 7 October, 2008, http://www.euvonal.hu/index.php?op=hirek&id=5372, 07.04.2009, 4:12pm • Tunyogi, Henrik: Barátokra hallgatunk, http://www.piacprofit.hu/magazin.html?akt_menu=&mag_id=750&hir_id=2690, 8 April, 2009, 9:32am • R. Andrews, Kenneth; Harvard Business Press, 1989: Ethics in practice - Kenneth E. Goodpaster, John B. Mathews, Jr.: Can a corporation have a conscience? p155 – p166 • A barátokra hallgatunk pénzügyekben, 2 September, 2008, http://www.klikkbank.hu/bankihirek/20080902-aviva-biztosito-baratokra-hallgatunk-apenzugyekben.html, 07.04.2009, 6:48pm • Vigvári, András: A bankok és a válság, Élet és Irodalom, LIII. évfolyam 7. szám, 2009. február 13, http://www.es.hu/print.php?nid=22124, 04.08.2009, 9:43am • GfK bizalom index: politikusok a lista sereghajtói, 25 August, 2008, http://www.magyarfogyaszto.hu/nyomtathatoverzio.html?article_id=2577&heading_id=44, 26.01. 2009, 7:05pm • Szalai, Ákos: Nem pénzügyi, bizalmi, 18 November, 2008, http://index.hu/velemeny/jegyzet/bizalom08111/, 07.04.2009, 6:47pm • A Régiók Bizottsága állásfoglalása – A pénzügyi válságról (2009/C 76/13), Az Európai Unió Hivatalos Lapja, 31 March, 2009, http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2009:076:0063:0065:HU:PDF, 07.04.2009, 6:45pm • Braun, Róbert, Mark Line: Tanulmány a vállalalatok társadalmi felelősségéről Magyarországon, 2007, http://europeandcis.undp.org/home/cst/show/A0AED266-F2031EE9-BF23CDADCAF7C4F4, 30.04.2009, 5:38pm • Schiffer, Péter, Dr., 22-23 May, 2008: A szolgáltatók társadalmi felelőssége, http://www.pszaf.hu/data/cms1562192/pszafhu_lpkonfanyag_schifferp.pdf, 08.04.2009, 9:35am

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• Milton, Friedman 13 September, 1970: The Social Responsibility of Business is to Increase its Profits, http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-respbusiness.html, 27.02.2009, 6:07pm • Lord Holme and Richard Watts: Making good business sense, publication in the World Business Council for Sustainable Development, http://www.mallenbaker.net/csr/definition.php, 02.02.2009, 10:38 • Tóth Gergely, 2007: A valóban felelős vállalat, A fenntarthatatlan fejlődésről, a vállalatok társadalmi felelősségének eszközeiről (CSR) és a mélyebb stratégiai megközelítésről, http://www.kovet.hu/view/main/60-940.html, 02.02.2009, 11:04 • Henry G. Manne, Friday, November 24, 2006 12:01 A.M. EST: Milton Friedman was right "Corporate social responsibility" is bunk, http://www.opinionjournal.com/editorial/feature.html?id=110009295, 27.01.2009, 18:41 • Mark Achbar, Jennifer Abbott, Joel Bakan: The Corporation, 2006 • Working Together for Growth and Jobs: A new start for the Lisbon Strategy, European Commission COM (2005) 24, February 2005, http://ec.europa.eu/enterprise/csr/index_en.htm, 27.02.2009, 15:14 • Braun Róbert, 16 September, 2006: CSR a pénzügyben, http://www.magellanpr.hu/index.php?inc=inc.hajonaplo.anyag.php&azon=354&title=%20%20CSR%20a%20p%C3%A9nz%C3%BCgyben, 27.01.2009, 13:21 • Magyar Nemzeti Bank, October, 2008: Jelentés a pénzügyi stabilitásról (Időközi felülvizsgálat) • Economy contracting, slow recovery seen: OECD, 25 November, 2008, 1:04pm EST, http://www.reuters.com/article/newsOne/idUSTRE4AO2Z920081125, 25.03.2009, 10:30 • Market sees 4.5% GDP contraction in Hungary in 2009 - Reuters poll, 19, March 2009 04:06:00 PM, http://www.portfolio.hu/en/cikkek.tdp?k=2&i=17196, 25.03.2009, 10:22 • A válság már kézzelfogható valóság, 19 March, 2009, 3:25pm http://index.hu/gazdasag/magyar/2009/03/19/a_valsag_mar_kezzelfoghato_valosag/, 23.03.2009, 11:16 • Szolnokiné Papp Judit, 13 May, 2008: A lakossági pénzügyi ismeretek helyzete és fejlesztési lehetőségei

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• Survey made by the Öngondoskodás Alapítvány, Befektetési Alapkezelők Magyarországi Szövetsége, Marketing Centrum Országos Piackutató Intézet, Pénzügyi Szervezetek Állami Felügyelete, www.ongondoskodas.hu/get.php?dir=./db/events/files&file=20060130YC8DGV_sajtoanya g.doc, 20.03.2009, 17:42 • Felelőtlen költekezés: út a hitelcsapdába, 3 December, 2008, 10:44pm, http://www.fogyasztok.hu/cikk/20081203/fogyasztovedelem_felelotlen_koltekezes_es_hite lfelvetel_valsag_ellenere/, 17.03.2009, 11:20 • GfK: Tizenhárom éves mélyponton a megtakarítással rendelkezők aránya, 09.12.2008: http://www.ugyvezeto.hu/cikk/56856/gfk-tizenharom-eves-melyponton-a-megtakaritassalrendelkezok-aranya?wa=b2business08, 17.03.2009, 12:56 • Kulturált pénzügyek, Heti Válasz, 9. évfolyam 8. szám, 19.02.2009: http://www.hetivalasz.hu/cikk/0902/kulturalt_penzugyek, 04.02.2009, 10:57 • Szonda Ipsos: A válság már kézzel fogható valóság, 19 March, 2009, 3:25pm: http://gazdasag.ma.hu/tart/cikk/c/0/40542/1/gazdasag/Szonda_Ipsos_A_valsag_mar_kezzel foghato_valosag, 19.03.2009, 16:41 • The Infórádió’s interview with Júlia Király, the National Bank of Hungary’s president • Felcsúti Péter’s speech made on the Financial Culture Conference, 02.10.2008 • Szentkuti László, 26.01.2009: Következmények nélküli világ, http://apenzszava.blog.vg.hu/2009/01/26/kovetkezmenyek-nelkuli-vilag/, 19.02.2009, 16:19 • http://www.kormanyszovivo.hu/page/valsagkalauz • Bacher, János: A lakosság pénzügyi kultúrája, bankolási szokásai (Magyar Fogyasztó 2008. Konferencia) • Soós, Csaba: Érdeke-e egy banknak fejleszteni ügyfelei pénzügyi ismereteit? (Magyar Fogyasztó 2008. Konferencia) • Hamecz, István: Magyar lakossági megtakarítási trendek (Magyar Fogyasztó 2008. Konferencia) • Kálmán, Tamás, Dr.: Meddig megyünk el? Fogyasztói kockázatvállalás a hitelfelvételnél (Magyar Fogyasztó 2008. Konferencia)

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• Hungarian Competition Authority Report, Budapest, December 2005: On the Sector Inquiry of Residential Mortgage Loans on based on the Article 36/A of Act LVII of 1996 on the Prohibition of Unfair and Restrictive Market Practices • Millward Brown, September 2006: Bankváltással kapcsolatos ismeretek és tapasztalatok • Hiányzik nálunk a pénzügyi kultúra, 3 December, 2008: http://www.metropol.hu/cikk/332964, 01.04.2009, 5:05pm • Scale Research, March 2007: Lakossági bank-kapcsolatok, bankválasztás szempontjai, bankváltás akadályai • Scale Research, 9 June, 2008: A banki tájékoztatás minőségével kapcsolatos kutatási eredmények • Gazdasági Versenyhivatal, 5 February, 2009: Váltás egyes lakossági és kisvállalati pénzügyi termékek esetében, Ágazati vizsgálat, Végleges jelentés • Gyurcsány Ferenc’s speech on the Financial Culture Conference, October 2008 • Angel Gurria’s speech on the Financial Culture Conference, October 2008 • Segítség a devizahiteleseknek, 19 February, 2009, http://www.csaladipenzmagazin.hu/2009/02/segitseg-a-devizahiteleseknek, 19.02.2009, 5:23pm • Szabó Máté: Be kellene vezetni a magáncsőd intézményét, 9 December, 2008, http://index.hu/gazdasag/magyar/oncsod1209/, 17.02.2009, 5:27pm • The Inforádió’s interview with Felcsúti Péter, President of the Hungarian Bank Association • Simor Andás’s speech on the Financial Culture Conference, October 2008 • A pénz beszél, 2008 • www.provident.hu

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Inter views Interview with Krutki Józsefné Dr., business branch executive of the Hungarian Post

Hogyan lehet értelmezni a pénzügyi kultúra fejlesztését Magyarországon? Ha azt mondom pénzügyi kultúra fejlesztése, akkor ezt a fogalmat Magyarországon nagyon sokféle képen lehet értelmezni. Egyrészt úgy, hogy a magyar fogyasztó számára nagyon fontos a készpénz, mert a pénzintézetek iránti bizalmi effektek nem megfelelőek, mert a pénzügyi termékek sokfélesége nem jól kommunikált, vagy, mert a pénzügyi termékek termékismertetője túlságosan rablónyelven van. Olvassunk csak el egy biztosítási kötvényt és egészen biztosan nem értjük meg, hogy miből is áll, főleg egy átlagember. Ez azért van, mert a mai pénzügyi kultúrában ezek a pénzintézetek nem vállalták föl azt a hiteles magatartást, hogy az ügyfél értse, mire is köt szerződést. Ez önmagában bizalmatlanságot vált ki. Például ez az oka annak, hogy Magyarországon az átlagosnál is nehezebb biztosítást eladni. Nem, csak azért mert az átlagembernek nincs pénze, hanem mert nem világos számára, hogy mit is vesz. Sajnos túl gyakran vannak brókerbotrányok, bank és biztosító botrányok és mivel általános ismeretei „vérszegények”, valamint az intézmények nem is segítenek abban, hogy ne legyenek „vérszegények”, ezért ez a bizalmi vákuum megmarad. Milyen módokon történhet meg a pénzügyi kultúra fejlesztése? A pénzügyi kultúra fejlesztése megtörténhet, vagyis meg kéne történnie a különböző oktatási intézmények képzéseiben. Ez alatt azt értem, hogy már egy nyolcadik osztályos gyereknek is legyen fogalma arról, hogy mi az a részvény, hogy mi az a cash flow, tehát tudjon kezelni néhány alapfogalmat. Tudja azt, miért fontos a számla vagy hogyan kell értelmezni a kamatot. Már tízen éves korban tisztázni kell vele a legfontosabb tételeket. De azt hiszem, a magyar oktatási rendszer erre nem fektet kellő hangsúlyt. Ugyanis, ahogyan a gyerek tudja idézni Arany Jánost, úgy kellene tudnia, hogy mi az a tőzsde vagy a THM. Így később lehet, hogy nem veszi föl 450%-ra a Provident kölcsönt, ha elromlik a tévéje és nem nyírja ki magát vele. Egyelőre azonban fölveszi, mert nem tudja értelmezni a kamatfeltételeket. Miért? Egyrészt mert nem tanítják meg ugye, másrészt a termék

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forgalmazója sem ad róla korrekt tájékoztatást. Azaz korrektnek, korrekt, viszont a témában járatlan ügyfélnek nem nyújt számukra is lefordítható információt. Tehát ez az alaphelyzet, melynek következtében az átlagember ismerete sekélyes. A termékek piacán ugyanis egy olyan bonyolult versenyhelyzet van, amelyet a pénzintézetek egymás között megfelelően tudnak közvetíteni, de az ügyfél nem a valódi információk mentén dönt, hanem úgy, hogy tetszik e neki az Emese, avagy sem. Itt jön a képbe az, hogy, azok akik, tehetnének valamit a pénzügyi kultúra fejlesztésének érdekében, valójában mit is tesznek ez ügyben? Mik az Ön tapasztalatai a Magyar Posta viszonylatában a magyar pénzügyi kultúrát illetően? Erre azt a példát tudnám felhozni, hogy amikor bezártuk a kistérségi postákat, akkor a falusi néni teljesen kétségbe esett, hogy a postán lévő pénze elveszett. Ez mutatja az általános kultúra hiányt, annak is egy szélsőséges megnyilvánulási formáját. Vagy mondjuk, megnézzük azt, hogy éves szinten három – négy ezermilliárd forint (!) megy át kézpénzben a Magyar Posta bugyrain, ugyanis ilyen óriási a csekkforgalom. Ez több dolgot megmutat a számunkra. Egyrészt rávilágít, hogy az emberek nagy tömegben bizalmatlanok az átutalási megbízásokkal, a netbanking szolgáltatásokkal szemben. Ennek az egyik oka lehet az, hogy szegények, tehát, maguk akarnak dönteni arról, hogy hányadikán fizetnek. Másik oka, hogy a banki együttműködés kultúrája nincs beépülve életükbe, harmadik oka pedig, hogy egészen egyszerűen jelentős részük nem rendelkezik Internettel, nincs tisztában használatával. Pedig a netbanking szolgáltatás esetében is ugyanúgy lehet dönteni, hogy mikor induljon a tranzakció, úgy, mint a „sárga csekk” esetében. Ehhez még hozzájön, hogy nincs mindenhol Internet, illetve drága az Internet, tehát az az infrastruktúra, ami lehetővé tenné a korszerű pénzügyi szolgáltatást, nincs jelen egy átlagos háztartásban. A helyzet javuló tendenciát mutat, köszönhetően például a Sulinet programnak. A vidéki lakosság körében gyakoribb ezen infrastruktúra hiánya a városi lakossággal szemben, pedig a villanyszámla, gázszámla náluk is megjelenik, így esetükben a kézpénzes műveletek száma óriási.

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Tehát Ön szerint miért olyan sok a készpénzes tranzakció? Szerintem ez egy háromtényezős jelenség. Oka az infrastruktúra hiánya, oka a megfelelő pénzügyi kultúra hiánya és oka, amiről még nem beszéltünk, a magyar adómorál. Sokszor olyan műveleteket végeznek el az emberek, melyeket, ha átutalással intéznének, akkor meg kellene jeleníteni a könyvelésben, viszont ha „zsebbe dug” akkor nem. A mostani készpénzforgalom és a mi csekkes forgalmunk egy jelentős része is olyan, ami az adóelkerülés okán történik. Tehát az ügyfél a tranzakciót magánnevén, nem pedig az üzlet címén és nevén, de leginkább nem bankszámlán bonyolítja. Én azt gondolom, hogy ez az a három faktor, ami visszahúzó tényező abban, hogy áttörést lehessen elérni a pénzügyi kultúra fejlesztése terén. Mi a Magyar Posta érdeke a pénzügyi kultúra fejlesztését illetően? Momentán a Magyar Posta érdeke, vagyis rövid távú érdeke, hogy ezt a sok készpénzt megtartsa. Tehát nem igazán érdeke, hogy a készpénzes szolgáltatást rövid időn belül banki szolgáltatásba vezesse át, mert bevételének nagyon nagy arányát

a készpénzes

szolgáltatásokból

majdhogynem

nyeri.

Ebben

a

minőségében

a

Magyar

Posta

monopóliumként működik, olyan jogokat bízott rá az állam, hogy ilyen nagy volumenben csekkes forgalmat csakis ő bonyolíthat. Ha a Magyar Posta számlavezető lenne, - ahogyan lesz is egy év múlva, azaz beiratkozik a pénzintézetek körébe köszönhetően egy törvénymódosításnak – akkor az a lehetőség nyílik meg számára, hogyha a kormány azt akarja, hogy a nyugdíjakat átutalással fizessék a polgároknak akkor azt az ő számláikon keresztül is történhet. De egészen addig, amíg a Magyar Posta nem a saját szolgáltatásai közé tudja átvezetni a készpénzes ügyfelet a számlásba, megszűnik a készpénzes szolgáltatása és mondjuk, a Budapest Bank elviszi az ügyfelet, akkor mi vesztünk és ők nyernek. Tehát egészen addig nem segítjük a készpénzes szolgáltatási körből az ügyfél kultúrát átvezetni a korszerűbb kultúrák irányába, amíg a saját parciális érdekeink, amíg a saját kompetenciáink nem alakulnak úgy, hogy banki szolgáltatást végezhessünk. Ez a lehetőség 2010-re létre fog jönni, de hozzáteszem, hogy ez egyben óriási kockázat is a Magyar Posta számára, hiszen ettől kezdve versenyhelyzetben találja magát. Ugyanis van harminc bank, a Magyar Posta beiratkozik, harmincegyediknek tehát osztoznia 88


kell az ügyfélkörön. Azonban van egy nagy előnye is, mégpedig, hogy a bankárok „nem kérik” az alacsony jövedelemmel rendelkezőket. Nem baj, mert a Magyar Posta kéri, mert a Magyar Posta nem bank lesz, hanem pénzintézet tehát betétet nem gyűjt, hanem kifizetéseket folyósít és hiteleket közvetít. A Magyar Posta alapszámla vezető lesz, ami azt jelenti, hogyha az állam azt rendeli tőle, akkor segélyt és nyugdíjat folyósíthat, melyek nem járnak olyan nagy kockázattal számára. Azonban ez mind csupa ha, mert erre még monopóliumaink nincsenek, ígérvényeink nincsenek, tehát a Magyar Postának ez irányú társadalmi szerepvállalása, mely tényleg radikálisan a pénzügyi kultúra fejlesztésére hat, akkor fog ténylegesen kibontakozni, amikor ezek az üzleti érdekei ténylegesen felépíthetőek lesznek. Mit jelent a pénzügyi kultúra fejlesztése Ön szerint banki oldalon? Igen, itt van egy másik szegmens is, mégpedig a banki oldal. A banki oldalnak az a vevőszegmens kell, akinek pénze van. Az összes többi nem kell neki. A bugyuta „Emese reklámok” is azért vannak, mert a bankszektor a gyorsan lefölözhető piacot akarja megszerezni magának. Azok kellenek neki, akik már betétesek, tehát arra tanítja meg, hogyha van egy akármilyen betéte, azt hogyan tegye át jobba. De ez nem azt jelenti, hogy az általános pénzügyi kultúrát fejleszti. Ez pokolian az üzleti és a parciális üzleti érdekek mentén működő dolog és miközben divatos dolog a társadalmi szerepvállalás a gazdasági életben, azért azt ne felejtsük el, hogy itt vállalati szereplők vannak, akik társadalmi szerepvállalása mindig korlátos, mert csakis addig hathat, amíg nem hat a vállalti érdekek ellenében. Nagyon tisztán kell látni, hogy ez egy keskeny mezsgye. Ugyanis, ha én azt akarom, hogy virágozzék minden mező és ennek érdekében jól megtanítom az ügyfelet, akkor lehet, hogy fogja magát és elmegy egy másik bankhoz. Ebben az esetben én jól ráfizettem és csakis az ügyfelem nyer az egészen. Mégis a cégek gondolkodásában, így a Magyar Posta gondolkodásában is egyre inkább megjelenik ez a fajta társadalmi szerepvállalás. Nagyon érdekes, hogy mik azok a momentumok, amikre ezeket fölépítik. A Magyar Posta egy száznegyven éve létező vállalat, karakterében a tradíciók dominálnak, azt az üzenetet próbálja közvetíteni az ügyfelek felé, hogy „tegnap is itt voltam és holnap is itt leszek”, hogy „én vagyok a stabilitás és a biztonság”. Ennek persze nem az az üzenete, hogy én vagyok a korszerű, hanem inkább az, hogy „bennem bízhatsz”, ami a mai pénzügyi helyzetben, a pénzügyi válságban nagyon sokat jelent. Mondanék egy példát, amiből érezhető, hogy milyen erős a bizalom a Magyar Posta 89


iránt, valamint, hogy milyen alacsony a pénzügyi kultúra ma Magyarországon. A Magyar Posta forgalmazza az Erste Bank ingatlanalapjait. Elég nagy állományunk van, ez körülbelül 25 milliárd forintnak megfelelőt jelent. Most, amikor a pénzügyi krízis első hulláma megtörtént és elindultak az ingatlanalapok kifele, valamint zárolták is az ingatlanalapok forgalmazását meg lehetett nézni, hogy mennyi pénzt vittek ki az OTP-ből mennyi pénzt vittek ki az Erstéből és mennyi pénzt vittek ki a Postából. Arányaiban a legmagasabb kiáramlás az OTP-nél volt, (ami ugye addigra már ezer sebből vérzett). Az Erste és a Posta relációjában az Erstéből kétszer annyi pénz ment ki, mint a Postából. Ez mit jelenthet? Ez azt jelentheti, hogy a Postában tipikusan kisbefektetők vannak, lakossági befektetők, akiknek van pár százezer vagy pár millió szabad forintjuk. Kivették a kincstárjegyből, aminek alacsony a kamata, átették az ingatlanalapokba, amiknek magas volt a kamatigérvénye. Annak ellenére, hogy ezek elég rossz papírrá váltak, nem vitték ki a Magyar Postából, csak minden tízedik, aminek az egyik oka, hogy nem tudja, hogyan működnek ezek a papírok, mely egy óriási kockázat számára, magyarul nincsen meg a pénzügyi kultúrája hozzá. A másik ok, hogy nem is akar utánamenni, mert a Magyar Posta örök, benne meg lehet bízni, azt nem gondolja végig, hogy ez nem a Magyar Posta terméke, hanem csak közvetít ebben. Azt mondja, hogy a Posta őt, nem szokta becsapni, ő eddig mindig megkapta, amit ígértek, a Posta holnap is ott van és ez a paternalizmus az, ami fönntartja benne azt az attitűdöt, hogy a Postára lehet bízni a pénzét, aztán majdcsak valami lesz. A Magyar Postának nem célja, hogy figyelmeztesse az ügyfelet, pedig lehet, hogy ez lenne a korrekt. Ugyanakkor nem is szabad üzleti szempontból figyelmeztetnie, hiszen a Magyar Postának majd csak 2010-től lehetnek saját jogon olyan termékei, amiben ajánlatot tud tenni, így komoly üzletvesztés érheti őt. Ezért gondolom azt, hogy a társadalmi szerepvállalás nagyon jól hangzik, de ezt a vállalat csakis a saját korlátos érdeksávján belül értelmezi. Igazából kimondhatjuk azt, hogy a Magyar Posta eddigi működésében nem igazán arról vált híressé, hogy a pénzügyi kultúrát fejlesztette, hanem inkább abban, hogy a paternalista érzést fönntartsa az emberekben: a Magyar Posta gondoskodó, így a társadalmi szerepvállalása az egészségmegőrzés és a környezetvédelemre irányul. Erre jó példa, hogy Szentendrén elektromos autókkal kézbesítünk. A pénzügyi kultúra fejlesztésével a Posta részéről a probléma a hagyományos termékkör, a készpénz szerepének fontossága és megtartása, valamint korszerű portfólióba jogosítványai híján nem tudja átforgatni.

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Ez persze nem azt jelenti, hogy nem lenne dolga e téren. A Magyar Postának van egy befektetése, egy leányvállalata a Magyar Posta Biztosító, amelyen keresztül un. Unit link biztosításokat ad. Ez lényegében egy befektetési konstrukció. Tehát vannak olyan intézményei, ahol gyakorolnia kell a pénzügyi kultúra fejlesztését. Például a Posta Biztosító szórólapjait tanulmányozva látni lehet, hogy ez egy fapados termék, magyarul olyan, amit az ügyfél gyorsan, ott helyben és egyszerűen el tud intézni. A reklámszövegnek az a lényege hogy miért egyszerű megkötni ezt a biztosítást és mégis védelmet jelent. Azt a fajta attitűdöt emeli ki, ami a Postában jó, hogy mindig megtalálod, gyorsan el tudod intézni, nem kell rá sokat várnod, és ha bármi bajod van, akkor a szokásos, ismerős postást kell keresned. Praktikus, ugyancsak paternalista elemre épül fel a dolog, és nem a pénzügyi kultúra átalakításáról szól. Így, a Magyar Postát igencsak meg lehet kritizálni, sőt lehet neki tanácsokat is adni, hiszen kitől várhatnánk el mástól, mint egy állami vállalattól, azt, hogy például a bugyrain átfolyó feketegazdaságból származó készpénz milliárdokat terelgesse? Tehát találja meg ebben a szerepét, a tulajdonosával teremtse meg ebben az érdekeltségét és vállalja föl magának. Önnek lenne ötlete azzal kapcsolatban, hogy a Magyar Posta miként vehetne részt a pénzügyi kultúra fejlesztésében? Mindennek az alfája és ómegája, hogy legyen pénzintézeti jogosítványunk, magyarul, hogy tudjunk alapszámlát vezetni. Ekkor a Magyar Állam dönthet úgy, hogy a segélyeket, járadékokat vagy a nyugdíjakat rajtunk keresztül utalja. Igen ám, de nem ezek a fekete pénzek. Viszont ekkor ott tudunk lenni, hogy a bérek átutalása is a mi számláinkon keresztül történjen. Igen ám, viszont erre ott van az a bizonyos harminc bank a piacon, akik ajánlják ezt a szolgáltatást és az ügyfelek vagy kérik, vagy nem. Az a versenyelőnyünk másokhoz képest, hogy mi ott is ott vagyunk, ahol mások nincsenek. Tehát olyan településkörben is jelen tudunk lenni, ahol nincsen bank. A pénzügy kutató nem olyan régen végzet egy kutatást, aminek az volt a tanulsága, hogy Magyarországon a lakosság felének nincsen számlája, ami döbbenetes. A falusi lakosság egyharmadára igaz, hogy nyugdíjas vagy segélyből él. Legfeljebb egyharmada az, aki fizetésből él és ennek az egyharmadnak is a töredéke az, aki számlára kéri a fizetését. Ugyanis minden tranzakció pénzbe kerül, nincs automata, minden alkalommal el kell utazni, hogy a számláról pénzt lehessen lehívni, valamint a kistelepülésekről a Magyar Posta is kivonult, tehát a számlán keresztül a pénzéhez jutni nem 91


egyszerű. Így felmerül az a kérdés, hogy a korszerű pénzügyi szolgáltatásokhoz az infrastruktúra valóban kiterjesztett e Magyarországon? A felelősségvállalás e téren azt jelenti, amire a Magyar Posta ajánlatot is tett annak idején az államnak, hogy az „E-Magyarország” program keretein belül, aminek az volt a lényege, hogy kétezer településen legyen informatikai alaphálózat, ezeket telepítsék a Magyar Posta kisposta hálózatára és abban a pillanatban ezeket az „e-szolgáltatásokat” el lehet érni. Hozzáteszem, hogy ahol posta van, ott van POS szolgáltatás is van. A Magyar Posta szerepvállalása az is, ha már a mobilpostánál tartunk, hogy miközben a kártyával való pénzhez jutás nem tarozik az egyetemes szolgáltatások közé, mi minden mobiljáratunkat felszereltünk mobil POS-sel. Tehát, ahol mobilposta jár, ott kártyával pénzhez lehet jutni. Igen ám, de egy kistelepülésen a mobilposta csak fél órát tartózkodik, így van az ügyfeleknek fél órájuk hozzájutni kártyalehúzóval a pénzükhöz. Ez egy nagyon vékony jég, nagyon kevés, ugyanakkor ebben csak mi léptünk. A nagy bankok, mint az Erste vagy az OTP inkább kifelé jöttek az ATM-mel. Meg kell nézni, milyen ezeknek a bankoknak a lefedettsége, hogyan ritkították meg ATM hálózatukat, látható, hogy kétezer lakos alatti településeken nem igazán vannak jelen, ezzel szemben a Magyar Posta minden hatszáz fő alatti településen megtalálható a mobilposta szolgáltatásával. Így, ha úgy tetszik egy társadalmi szerepvállalás, az hogy a postákon vagy a mobilszolgáltatóin kártyával pénzhez jutási lehetőséget biztosít az ügyfelek számára, miközben üzleti érdekei a kézpénzes szolgáltatások fönntartását célozzák. Én azt gondolom, hogy a Magyar Posta, de főleg a pénzintézetek abban tehetnek nagyon sokat, hogy magyarul, érthető módon ismertetik a termékeket. Tehát azokat az ismereteket, amik a reális döntéshozatalhoz nélkülözhetetlenek, amit nyolcadik osztályban nem „ültetnek” a gyerek fejébe, nekünk kell elmagyarázni az ügyfeleknek. Én azt gondolom, hogy elvárható ezektől a vállalatoktól, hogy a reklámjaikban adjanak korrekt tájékoztatást, vagy ha nem is azokban, akkor tanító, nevelő szándékkal készítsenek olyan szóróanyagokat, könyvecskéket, melyekből az ügyfél kellően tájékozódhat. A Raiffeisen „Okos Professzor”-os reklámja egy aprócska kezdeményezés ilyen téren, egy elem az ezer közül. Viszont hatásfokához ismerni kell, azt, hogy hány embert ér el vagy, hogy nulla alapismerettel mennyire érthető. Meg az is fontos, hogy az ügyfeleknek nem azt kell megérteniük, hogy ez az egész a gazdaság kifehérítése céljából történik, mert számukra ez azt jelenti, hogy adót kell fizetni és ebből kifolyólag ez egyáltalán nem érdekük. Sokan csak fel akarják venni a segélyt és közben elmenni és napszám szerű munkát végezni, úgy hogy abból a pénzből neki már ne kelljen 92


adóznia. Az ügyféllel a termékelőnyt kell megértetni, azt, hogy számára mi az előnye annak, ha számlán bonyolítja a pénzügyeit. A nagy bankok közül egyedül az UniCredit tett lépéseket ez irányba, azzal, hogy 17 országban ingyenessé tette az ATM-es készpénzfelvételt. Minden más esetben – és egyébként nagyon eltérő áraik vannak a bankoknak- ez pénzbe kerül, különösen az OTP-nél, aki magas áraival visszaél hatalmas ügyfélkörével. A Magyar Posta nemrégiben kialakított ernyőmárkákat, még a reklámstruktúráját is erre építette fel.

Kialakított egy biztosítási brandet meg egy banki brandet, amit most

szeretnénk átalakítani és azt mondani, hogy az almárka az a Magyar Posta, mint pénzügyi szolgáltató ezen belül vannak banki és biztosítási termékei, de azt az üzenetet szeretnénk erősíteni az ügyfél szemében, hogy a Magyar Posta egy pénzügyi szolgáltató, ezért gyere ide a pénz- és ezzel összefüggő banki és biztosítási ügyeiddel. Ez olyan szempontból azért fontos, hogy ráépülhet arra a bizalmi faktorra, amiért az ügyfél inkább hozzánk jön és nem máshoz, de ennek ellenére azt mondom, hogy az ügyfélnek meg kell értenie és meg kell találnia a saját személyes érdekei túl a tiltásokon. Ugyanis mondhatja a kormány, hogy „ez tilos”, ha ez az ügyfél érdekeivel nagyon szemben áll, mondjuk, hogy túlélési esélyeit rontja a piacon, akkor ő meg fogja keresni a kiskapukat, és a „feketét”. Ez akkor fog beállni egy egyensúlyra, ha az ügyfél megtalálja az előnyöket. Az UniCredit tudomásom szerint az egyetlen olyan bank, amely ingyenessé tette a számláról való pénzlevételt. Az OTP, akinek a legnagyobb a bankhálózata már vissza is él magas áraival, mivel tudja, hogy nehéz a bankszámla váltani. Tudja jól, hogy az ember nehezen szánja rá magát, hogy bemenjen a bankba, sorba álljon, átírassa a mérőórákat esetleg, tehát amennyire nehéz volt régen telefonos szolgáltatót váltani olyan nehéz ma az ügyfelek számára a bankváltás. Ezért lényeges a pénzügyi kultúra fejlesztésében a jogszabályi környezet változása, mely például megkönnyítené a bankváltást is, mert a reális piaci mozgások csakis ekkor fognak elindulni. A reális piaci mozgások elindulásának másik feltétele az, hogy az ügyfél tisztában legyen a szolgáltatás lényegével. Egyébként a szolgáltatások túlárazottak a magyar piacon, már ha abból indulunk ki, hogy a lakosság felének nincsen számlája. Mi a véleménye, elég figyelmet fordít a kormány a pénzügyi kultúra fejlesztésére? Mostanában elég sok minden foglalkozik az általános pénzügyi kultúrával, kultúra hiányával. A kormánynak volt egy projektje mely a készpénz szerepének visszaszorítására 93


irányult. Ugyanis, ha készpénz szerepe csökken, akkor a pénzáramlások sokkal átláthatóbbakká válnak. Ez egy fiskális gondolkodásmód, mely az adócsalók elfogására irányul.

Ebben azt gondolom, hogy a kormányt sem az mozgatta, hogy hogyan lehet

fejleszteni a pénzügyi kultúrát, hanem érthetően abból indul ki, hogy ma Magyarországon van, mondjuk két millió adózó, ennek a mondjuk, a fele minimálbér után adózik. Kis részük valóban minimálbért keres, a többi meg úgy számolja el magát. Ebből kifolyólag hoz a kormány olyan döntéseket, mely értelmében nem lehet feladni készpénzben 250 000 forint feletti összeget. Persze az ügyfélnek semeddig nem fog tartani mondjuk négyszer 249 000 forintot készpénzben csekken befizetni, három különböző postán és közben ugyanúgy nem fog adózni, ahogy ez előtt sem. Tehát, ha a pénzügyi kultúrát csak ürügyként használjuk fel a pénzek átláthatóságára, az adó becsikarására, akkor nem tartunk sehol. A másik nagyon érdekes momentum, mely kifejezetten jellemzi a hazai pénzügyi kultúrát, hogy a hazai munkavállalók fele, amint megkapja a bankszámlára a pénzét másnap egy összegben le is veszi azt. Azért teszi ezt, mert nem akar ötször hozzányúlni a pénzéhez, hiszen akkor ötször kellene tranzakciós díjat fizetnie. Mivel annyira kevés a pénze a számlán, kvázi annyira kevés pénzt keres a banki szolgáltatási díjhoz képest, hogy ez nem éri meg neki. Tehát nem csak az állam, hanem a vállalatok is manapság a társadalmi szerepvállalásuk erősítése terén megállnak abban, hogy nézzétek meg milyen szépek, kedvesek és megbízhatóak vagyunk, de mivel parciális gazdasági érdekeik egyáltalán nem kívánják, mondjuk a sárga csekkek megszüntetését, ezért ennél tovább nem is mennek. Szeretnék mondani egy másik példát: amikor elmegyünk a postára és be akarunk fizetni egy sárga csekket, akkor a kisasszony az ablaknál megkérdezi, hogy van e postakártyánk. Ha azt mondjuk nincsen, akkor azt mondja, az nagy kár, mert postakártyával egy csekk felvétele csak 50 forintba kerülne, így meg belekerül, nem is tudom, 150-be. Tehát, ezzel a kommunikációval mi nem azt magyarázzuk meg az ügyfélnek, hogy miért jó, ha számlán vezeti pénzét, hanem felhozunk neki egy példát, hogy ha postaszámlát nyit, akkor erről a számláról könnyen és olcsón tudja intézni a pénzügyeit. Azonban jelenleg a Magyar Postának nem érdeke a sárga csekkek megszüntetése, ugyanis a sárga csekkes forgalomból cirka 35 milliárd forintnyi bevételt csinál a sárga csekkek feladásából. Erről a pénzről egyszerűen nem mondhat le, csak azért mert a pénzügyi kultúrát fejleszteni kéne.

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Akkor mit tehet a Magyar Posta a magyar pénzügyi kultúra fejlesztéséért úgy, hogy parciális üzleti érdekei ne sérüljenek? Amit már megtettünk és a javunkra írható az a POS szolgáltatás kiterjesztése, valamint minden olyan pénzügyi műveletet, amely lebonyolítható kártyával azt a postán el lehet intézni. Ezt oda is betettük, ahol egyébként nem lenne szolgáltatási kötelezettségünk. Én azt gondolom, hogy amit biztosan tehetnénk az a korrektebb tájékoztatatás a termékeinkről és a szolgáltatásainkról valamint megtanítunk az ügyfeleknek alapfogalmakat. Igen ám, lehet, hogy elérjük ezzel, hogy az emberek nem csinálnak Providentes butaságokat, de széttörjük azt a tradíciót, hogy az emberek hisznek a Postában, egyfajta módon, vakon bíznak benne, és mindezt a rációra építjük fel. Azonban a Magyar Postának ez is csak korlátozott érdeke. Ugyanis a legtöbb ügyfél nem azért jön ide, mert a mi szolgáltatásunk a legjobb, hanem, mert mi vagyunk a legkényelmesebbek és számukra a legmegbízhatóbbak, legidőtállóbbak.

Interview with Betty Ritter, high school mathematics teacher Mióta van Ön matematika tanári pályáján? Munkája során mikor kezdett el foglalkozni a tanulok pénzügyi kultúrájának fejlesztésével? Miért érezte ennek szükségét? Mivel kezdte, mire fektette leginkább a hangsúlyt? Beszélt e esetleg személyes tapasztalatokról? 1986 óta tanítok matematikát. A kamatos kamat és hitel felvétellel kapcsolatos feladatok mindig benne voltak a tanított anyagomban. Ezzel gyakorlatilag mindig is fejlesztettem azt a képességet, amellyel könnyebben, gyorsabban átláthatják a fontos kérdéseket. Ki szoktam térni a telefonos- és egyéb biztosítási ügynökök általam megtapasztalt trükkjeire is. Mindezt azért, mert a matematika tanításának egyik hozadéka lehet, hogy az emberek könnyen, gyorsan eligazodnak a számok világában, nehezebb őket becsapni. Be szoktam vinni banki reklámcédulákat is. Hogyan fogadták a tanulók az Ön által elmondottakat? Úgy gondolja sikerült feleresztenie az érdeklődésüket, esetleg elgondolkodtak azon, amit mondott? Számon kérte az elmondottakat? Kapott e esetleg valamilyen visszajelzést? 95


Az érdekességekre mindig jobban figyelnek. Hogy kiben ébredt egy percent túli érdeklődés, azt nehéz lemérni. Kevés olyan visszajelzés jutott el hozzám, ami pozitív megerősítés lenne, de azért ilyenek is vannak. Ami a feladatokat illeti, azokat számon kértem, a tananyag része, hogy egyszerűbb kamatos feladatokkal boldoguljanak. Ön milyennek ítéli meg a mai fiatalok (gondolok itt a kisiskolásoktól a gimnazista korosztályig) pénzügyi jártasságát? Mennyire vannak tisztában az alapvető pénzügyi fogalmakkal, mint kötvény, részvény, kamat, THM, futamidő? Nagyon gyengének ítélem meg a fiatalok pénzügyi ismereteit, kevesen vannak tisztában a fent említett fogalmakkal, még a gimnazista korosztályban is. Hallott-e a Magyar Nemzeti Bank pénzügyi kultúra fejlesztési programjáról vagy bármely más intézmény ez irányú tevékenységéről? Esetleg reszt vett e tanulóival valamilyen pénzügyi jártasságot fejlesztő versenyen? Hallottam, de nem vettem részt az MNB programjában, sem más programban. Magánemberként mi a véleménye a magyar lakosság pénzügyi kultúráját? Ön szerint mi lehet a hihetetlen eladósodás problémájának kiindulópontja? Hibáztathatjuk-e a pénzügyi intézményeket, az államot vagy bárkit a kialakult helyzet miatt? Alacsony kultúrájú, jól beetethető ország vagyunk. A mérhetetlen mennyiségű reklám üzenete: vedd meg, mert megérdemled, menni fog, méghozzá könnyedén. Ez a hazugság egy olyan országban, ahol a lakosságnak mindössze 15%-a fizet adót (tehát a csalás elég nagyfokú) elérte hatását. Mindaddig, amíg a kétkezi munkának (egy jó asztalosnak, egy paradicsom termelőnek) vagy akár egy tanárnak nincs akkora becsülete, mint egy BMW-vel járó munkanélkülinek, vagy egy kezdő bankosnak, addig nem is lesz máshogy. Ön szerint hol kell elkezdeni a problémák orvosolását? A pénzügyi intézményekben (korrektebb

tájékoztatással,

körültekintőbb

hitelfeltételekkel),

szigorúbb

állami

szabályozással, avagy az emberek fejében (kisiskolás korban mar elkezdeni pénzügyi ismeretek oktatását, felhívni a figyelmet az időskori előgondoskodásra, arra, hogy ne hitelből vegyünk mikrohullámú sütőt, stb.)? 96


Igen én azt gondolom, hogy a kérdésben felsoroltakra mind, egytől egyig szükség lenne, mégpedig egyszerre. Ön, mint matematika tanárnő, mit gondola, mit tehet a pénzügyi kultúra fejlesztése érdekében? Amit fent leírtam. Esetleg nyomatékosabban.

Interview with Béla Cserepes, free‐lance financial consultant

Mióta dolgozik Ön a pénzügyi szektorban és annak mely területén? 2004-ben kerültem közvetlenebb kapcsolatba a pénzügyi, banki területtel, miután cégem ingatlanközvetítéssel kezdett foglalkozni. Mivel egyre gyakrabban fordult elő ügyfeleim részéről a finanszírozás igénye, elkezdtem keresni annak lehetőségét, mely bankok, milyen feltételek megléte esetén nyújtanak hiteleket. Az első pillanattól kezdve nyilvánvalóvá vált az a felismerés, hogy ezen a területen csak akkor lehet egy közvetítő sikeres, ha több bank termékét tudja összehasonlítani, és kínálni ügyfeleinek. Hogy ez mennyire így működik, akkor vált számomra egyértelművé, amikor 2005. áprilisában megismertem

Európa

legnagyobb

független

pénzügyi

tanácsadó

szervezetét,

a

Németországban, Hannoverben alapított és 20 éves pénzügyi múlttal rendelkező AWD-t, amely éppen ebben az évben kezdte el tevékenységét Magyarországon. Az AWD elsősorban a lakossági szektorban befektetések, biztosítások, hitelezések, időskori előgondoskodás területén nyújtott szolgáltatást, amely tevékenységet ettől az időponttól kezdve végzem én is. Mely pénzintézetekkel volt eddig kapcsolata és mi a véleménye ezekről (egyenként)? Mennyire

ítéli

meg

tájékoztatásukat,

pénzügyi

szolgáltatásukat

érthetőnek

és

megbízhatónak? A partnerek között Magyarország legjelentősebb bankjai és biztosítói ugyanúgy megtalálhatók, mint néhány külföldi befektető társaság és biztosító társaság. A cél elsősorban az volt, megőrizve a függetlenséget, hogy az ügyfelek igényeit több pénzügyi termék összehasonlítása után az optimálist kiválasztva elégítsük ki. 97


A gyakorlat ugyanis az, ha egy ügyfél felkeres egy bankot, például finanszírozási igénnyel, ott azonnal elhalmozzák minden olyan információval, amelyek azt sugallják, hogy az ő saját terméküknél nincs jobb alternatíva, ez a hitelforma csak az Ő személyére lett kitalálva stb. Ez teljesen érthető banki oldalról, de hátrányos az ügyfélnek, mert a pénzügyi ismeretek hiánya miatt könnyen megtéveszthetővé vállnak. Ez pedig a különböző költségekben: törlesztőrészlet, kamat és kezelési költség, vagy például rendkívüli törlesztéskor jelentkező költségekben realizálódhatnak, amely hátrányosan érintheti mindazokat, akik nem egy független tanácsadó szolgáltatását veszik igénybe. Hátrányos továbbá az ügyfelek számára az, hogy a bankok, vagy a különböző pénzügyi szolgáltatók elsősorban arra törekszenek, hogy a náluk megjelent ügyfelek minél kevesebbet várakozzanak, minél előbb kerüljenek az ügyintézőhöz, ahol a leggyorsabban legyen elintézve ügyük, mert a következő ügyfél már várakozik. Ezért a tájékoztatás hiányos, a legtöbbször csak annyi információ jut el az ügyfélhez, amely azt sugallja, hogy ez a pénzintézet a legideálisabb a számára. Ha vannak negatív tapasztalatai, akkor mely pénzintézetekkel vannak és milyen téren? A negatív tapasztalatok, amelyek elsősorban ügyfelektől származnak, a fentebb leírtak. További tapasztalatom az, hogy a legsikeresebb kapcsolatot csak azokkal a pénzintézetekkel tudtuk folyamatosan fenntartani, és működtetni, ahol gondot fordítottak a folyamatos, napra kész információra, ahol volt egy kapcsolattartó, aki mindig rendelkezésre állt, ha szükség volt segítségre. Jellemző a pénzintézetekre, hogy mérik, mennyi idő alatt fordul meg náluk egy ügyfél, milyen gyorsan szolgálják ki, ezért, sajnos az alapos és korrekt kiszolgálás hátrányt szenved. Mi az Ön tapasztalata, milyen fajta pénzügyi szolgáltatásokat keresnek leginkább az emberek? Az általános tapasztalatom az, hogy Magyarországon a lakossági pénzügyi kultúra rendkívül alacsony szintű. Csak egy kisebb réteg foglalkozik azzal, hogy a számára legideálisabb megoldásokat megkeresse vagy személyes érdeklődéssel, vagy igénybe véve tanácsadók, vagy tanácsadó cégek segítségét.

98


A lakosság egy jelentős része még mindig a helyi takarékszövetkezetekben, vagy OTP fiókokban gondolkodik, biztosítások esetén pedig az Állami Biztosító utódaiban, az Allianz, vagy az AB Aegon biztosítókban. Ezért rendkívül fontos a személyes tanácsadók, a független pénzügyi tanácsadók szerepe. Az utóbbi években megnőtt azok száma, akik lakásproblémájuk megoldását banki hitelekből valósították meg. Ez most, amikor a forint árfolyam kedvezőtlenné vált a nemzetközi gazdasági helyzet miatt, sok embert hátrányosan érintett. Nagyon sokan áttértek a készpénzkímélő eszközök (bankkártya) használatára. 2006. szeptember 1., a kamatadó bevezetése óta, a hosszú távú megtakarítások is jelentősen megnőttek. Szintén megfigyelhető az is, hogy a közvetlen befektetések iránti igény is megnőtt (hazai és nemzetközi alapokba). Az is érezhető, hogy már most sokan vannak, akik megtakarításaikat Euróban, svájci frankban, vagy dollárban tartják. Könnyen el tudja fogadtatni ajánlatát ügyfeleivel? Milyennek ítéli meg ügyfelei bizalmát a pénzügyi intézeteket illetően? Azok az ügyfelek, akik megismerik a független pénzügyi tanácsadás előnyeit, a tanácsadó munkáját, módszereit, a továbbiakban inkább kötődnek a tanácsadóhoz, mint a pénzintézetekhez. Azt követően pedig, hogy több hasonló, vagy azonos termék összehasonlítása után hozhat pénzügyi döntést, hogy a tanácsadója szinte mindig elérhető számára, hogy kapcsolatuk emberi és közvetlen, már fel sem merülhet a bizalom kérdése. Sőt a legtöbb esetben ennek a bizalomnak a jele az, hogy ismerősei, barátai körében továbbajánlása is megtörténik a szolgáltatásnak. A pénzintézetekből éppen ez, a személyes kapcsolat hiányzik, ezért soha nem alakulhat ki olyan bizalmi kapcsolat ügyintéző és ügyfél között, mint a személyes pénzügyi tanácsadásban. Mi

a

tapasztalata

ügyfelei

pénzügyi

jártasságával?

Mennyire

tájékozottak

a

szakkifejezéseket, kondíciókat illetően? Ez természetesen változó. Az, mint fentebb elmondtam, még mindig jellemző a lakossági szektor jelentős részére, hogy pénzügyi ismeretek hiányában szenved. Általában rövidtávban 99


gondolkodik megtakarításaiban, mert eddig nem volt hozzászokva, hogy ebben a szektorban egyre többen vannak hozzáértők, akik a célok, a szándékok, a vágyak megismerését követően személyre szóló pénzügyi stratégiát tudnak kidolgozni. Az egy érdekes dolog, hogy sok szakember azzal kívánja „tudását” csillogtatni, hogy idegen kifejezéseket használ, ezzel megnehezíti az egyszerű emberek számára annak a dolognak a megértését, amelyet éppen megismertetni, elfogadtatni kíván. Számomra érthetetlen a bankok, biztosítók, egyéb pénzpiaci szereplők olyan magatartása, amely nem az érthetőség, az egyszerűség irányába hat. Ugyanilyen gondot okoz az is, amikor a legfontosabb tájékoztató anyagok apró betűkkel íródva, olvashatatlanná válnak az ügyfél számára, és csak a reklám válik olvashatóvá. Ügyfelei

közül

mennyi

panaszossal

találkozott?

Mivel

kapcsolatban

voltak

ők

elégedetlenek? Mennyiben eredt ez a nem megfelelő tájékoztatásból, avagy pénzügyi járatlanságukból? Az a tapasztalat, hogy, amikor az ügyfél egy szolgáltatást igénybe kíván venni, bármilyen alapos is a tájékoztatás, a figyelem egy idő után már arra irányul, hogy minél előbb legyünk készen, hol kell aláírni, mikor lesz vége. Nagyon kevés még az olyan ügyfél, aki alapos, körültekintő. Amikor viszont a szolgáltatási oldal nem a kívánt szinten működik, például nem úgy alakulnak a befektetések hozamai, vagy például a forint árfolyamváltozása miatt megemelkednek a törlesztő részletek, jelentkeznek, mert elfelejtkeznek arról, hogy a első tájékoztatókban mi és hogy hangzott el. Ugyanígy gyakori, hogy például a biztosítási szolgáltatásokról figyelmetlenség, vagy tájékoztatási hiány miatt más és más információk maradnak meg az emlékezetekben, ezért kellemetlen perceket jelent tanácsadónak, ügyfélnek, amikor ezekkel szembesülni kell. A MIFID törvény ebben nagy segítséget jelent, amely értelmében az ügyféllel történő első találkozásról azonnal feljegyzést kell készíteni, rögzíteni minden elhangzott információt és mindkét félnek aláírásával ellenjegyezni szükséges ezeket. Ezzel tanácsadó és ügyfél egyaránt védve van minden esetleges, további kellemetlenségtől.

100


Ön mit gondol, hogyan lehetne a pénzügyi intézetek presztízsét visszaállítani? Ön szerint az emberek pénzügyi jártasságát lenne szükséges mélyíteni, avagy szigorúbb szabályokkal kényszeríteni

a

pénzintézeteket

korrektebb

tájékoztatásra,

tisztább

kondíciókra,

körültekintőbb hitelkihelyezésre? Nekem meggyőződésem, hogy a szigorúbb szabályozás, kényszerintézkedések bevezetése csak részben oldaná meg a jelenleg meglévő problémát. A pénzintézetek zöme nem független, saját termékeit tolja előtérbe, mert az érdekei ezt kívánják. Az ő szempontjukból az ügyfél csak másodlagos. Nekik a tervek teljesítése fontos mindenáron, mert ennek függvénye a jövedelem, a munkahely megtartása. Ezekben nem fordul elő, hogy más cég termékeivel összehasonlítsák a sajátjukat, mielőtt megoldást kínálnak egy ügyfélnek pénzügyi gondjaira. Ezért számomra egyértelmű, hogy az elkövetkező időszak a független tanácsadók és tanácsadó cégek sikeréről szól majd. A személyes tanácsadás, a személyre szóló pénzügyi megoldások jelentik a következő években a megoldásokat az emberek számára. Ebben benne van az is, hogy a személyes találkozás során az ügyfelek alaposabb tájékoztatásban,

átfogó

és

széleskörű

szolgáltatásban

részesülnek,

ennek

során

tájékozottságuk, ismeretük is bővül. Kevesebb és egyre ritkább lesz az, amikor az alapos átgondolt és körültekintő stratégia hiánya miatt az ügyfél hátrányt szenved.

101

The social responsibility of financial institutions and the Hungarian Post regarding the financial culture. Készítette: Cserepes Liána

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