Measuring the impact of
financial capability initiatives

How do we know we are improving financial capability?

Many people and organisations are working across Australia to improve financial capability and deliver on the vision of the National Financial Capability Strategy.

This work might be financial coaching, business planning, or education workshops. It could be financial support, financial counselling, access to no-interest or fee-free loans or products, or grants bodies, or government funding programs. Similarly, it could be online information, digital apps, professional development, or workplace initiatives. It also includes academic research into ‘what works’, and policy development to identify the systems changes needed to better support peoples’ ability to improve their understanding of, confidence in, and management of money.

Organisations engaged in this work are wide and varied: non-government organisations, schools, banks and other financial service providers, government agencies, and universities.

But when asked “what impact did your work have?” – or “what changes did you see as a result of this program?” — it can be hard to explain.

There is a clear need for a common language to describe the changes in behaviour, systems or products that arise from financial capability efforts and there is a strong interest in understanding what is meant by improving financial capability, and how progress can be measured over time.

In 2019-2020, ASIC worked with Social Ventures Australia (SVA) to develop a shared impact (or outcomes) framework to support the monitoring and evaluation of financial capability initiatives in Australia. SVA first undertook a literature review [PDF] to understand the financial capability landscape and relevant outcomes frameworks. SVA and ASIC then facilitated five stakeholder workshops with NGOs, industry, academics and other government agencies to co-design a theory of change.

As part of refreshing the National Strategy, Treasury will build on the work commenced by ASIC to develop a monitoring and evaluation framework. The framework will help to inform understanding of what works to improve financial capability and how Australians’ financial capability is tracking over time.