Research released today by the Centre for Social Impact (CSI) and commissioned by NAB shows that organisations have in the past only been looking at part of the picture when evaluating the impact of programs to improve financial health of Australians.
The Financial Resilience in Australia 2015 report found that financial health needs to be determined not only in terms of access to products and services, the traditional concept of financial inclusion, but by reference to the broader concept of financial resilience.
CSI and NAB, who have over five years partnered to measure financial exclusion in Australia, have this year adopted this new financial resilience approach to measuring financial health.
Financial resilience considers four components for coping with financial shocks: access to financial products and services, financial knowledge and behaviour, access to social capital and access to income and economic resources. It then measures their combined and cumulative impact on financial resilience.
Professor Kristy Muir, Research Director at CSI said the new methodology was much more comprehensive and useful.
“It is applicable and relevant for everyone, not just those at greatest risk of financial exclusion. It provides a much deeper understanding of people’s financial situations, the resources they need to withstand adversity and who in the population fares better or worse – and why,” Prof Muir said.
NAB’s GM of Corporate Responsibility Jodi Geddes said helping customers better prepare for life’s little and big surprises was an important part of what we do.
“This research will help the general population better understand what they can do to improve their financial resilience and will inform an evaluation tool to help organisations better evaluate their programs aimed at addressing financial inclusion,” Ms Geddes said.
A summary of the research is available here.