The Organisation for Economic Co-operation and Development (OECD) Consumer Finance Risk Monitor 2026 report states that low financial literacy is one of the biggest concerns for regulators and financial authorities worldwide. Although access to financial services has expanded thanks to digitalization, understanding of these products has not progressed at the same pace, meaning that many consumers use financial products they do not fully understand.

READ ALSO. OECD warns: Easy credit and fintech are increasing consumer debt

This trend is increasing consumers’ vulnerability to fraud, excessive debt, and poorly informed financial decisions.

How serious is the lack of financial literacy worldwide?

The level of financial understanding among consumers remains considerably low across many regions.

According to the OECD report, only about 34% of adults reach the minimum level of financial literacy, meaning that most people lack a solid understanding of basic concepts related to saving, credit, and investments.

This knowledge gap has direct consequences for the way consumers make decisions about their money.

Without a clear understanding of how financial products work, many people may accept unfavorable terms or take on risks they do not fully understand.

Why do many consumers not understand financial products?

One of the main challenges is the growing complexity of the modern financial system. Financial institutions now offer a wide variety of products, ranging from credit cards and personal loans to digital investments and online financing platforms.

However, these products often include:

• complex contractual terms
• fee structures that are difficult to interpret
• variable interest rates
• clauses that are not always easy to understand

In many cases, consumers accept these services without thoroughly reviewing their features or actual costs.

What financial decisions are consumers making without enough information?

A lack of financial education directly affects the way people interact with the financial system.

The OECD report indicates that only 26% of consumers compare financial products before choosing one, while just 24% seek independent advice before making financial decisions.

This means that a large share of the population chooses financial products based on advertising, informal recommendations, or impulsive decisions.

As a result, many consumers end up paying more for loans, fees, or financial services that could have been avoided with better information.

How does digitalization contribute to the lack of financial understanding?

The digitalization of financial services has made it easier to access products such as instant loans, digital payments, and online investments.

However, this convenience can also lead consumers to purchase financial services with very limited information.

Mobile apps and fintech platforms allow users to open accounts, apply for loans, or invest money within minutes. Yet the speed of these processes can reduce the time users spend reviewing the product’s terms and conditions.

This trend has raised concerns among regulators, who warn that technological innovation must be accompanied by greater transparency and stronger financial education.

What risks do consumers face when they do not understand their financial products?

A lack of financial understanding can create multiple challenges for consumers. The most common risks include:

• excessive debt
• difficulty meeting loan repayment obligations
• purchasing unnecessary financial products
• greater vulnerability to financial fraud

In addition, consumers who do not fully understand their financial products may face greater difficulties when planning their long-term finances.

What are governments doing to improve financial literacy?

In response to this situation, many financial authorities are promoting financial education programs to strengthen consumers’ financial capabilities.

Among the most common initiatives are:

• public awareness campaigns about financial products
• financial education programs in schools and universities
• digital tools to compare financial products
• regulations requiring financial institutions to improve the transparency of their services

The OECD states that the goal is to enable consumers to make informed financial decisions and avoid unnecessary financial risks.