Singapore is ranked the fourth most competitive financial centre in the world by the 25th Global Financial Centres Index (GFCI). Part of the reason for its high position is a conducive and pro-business environment, political stability, and a skilled workforce.
While the government is working relentlessly to build a pipeline of financial professionals and leaders, the S&P Global Financial Literacy Survey revealed that only 59% of adults in Singapore are financially literate.
This effectively means that the general population of Singapore lacked a good grasp of financial knowledge, and only slightly more than half of the entire population aged 15 and above understood basic financial concepts that would help them make informed financial choices regarding saving, investing, borrowing and more.
This is a worrying trend.
The Praxis Company, a Singapore-headquartered firm seeks to change that. Using financial gamification that was developed by a group of financial services professionals and gameplay design experts who shared a passion for financial literacy, Praxis wants to teach people across age-groups how to master their money management through immersive gameplay.
For almost 20 years, the company has been developing bespoke games for leading banks and financial institutions, as well as numerous schools and community organizations.
Today Praxis operates in Singapore, Malaysia, Thailand, the Philippines, and Vietnam.
Praxis recently obtained USD 3 million from Triple P Capital, an expert investor in Southeast Asian non-bank financial services.
KrASIA recently spoke with Greg Martin, Group CEO of The Praxis Company to understand how the company uses gaming to help people master financial concepts and knowledge.
KrASIA (Kr): First of all, what is The Praxis Company?
Greg Martin (GM): Financial literacy conjures up an image of classrooms or rather staid books, and for a long time, financial literacy classes as we know it have been largely theory-based. With Praxis, we want to ensure that people will be able to put theory into practice so they can effectively apply concepts learned in their lives.
And why through gameplay?
Because gamification makes learning fun and therefore, effective. When people are engaged, they learn by doing in a simulated, fun environment that combines theory with application.
Praxis’ gameplay simplifies and brings to life abstract and sometimes confusing financial literacy concepts for easier understanding that really lasts.
Kr: Praxis is built on the worrying trend of financial illiteracy first in Singapore then across Southeast Asia. Just how pressing is the issue?
GM: Very! A survey by the OECD found that average financial literacy scores in five Southeast Asian countries (Malaysia, Indonesia, Thailand, Vietnam, and Cambodia) is just 12.46%. Another survey by Nielsen found that a third of working Singapore adults are not planning for their retirement with 40% of them lacking an understanding of what to do and another 25% not knowing when to start planning
The lack of financial literacy is an issue with myriad and far-reaching repercussions because financial literacy concepts touch almost every aspect of our lives, whether we’re aware of it or not.
More generally speaking, the lack of financial literacy may have resounding effects in Asia, where a large proportion of the world’s unbanked resides, and which is experiencing the rapid growth of digital banking services. However, financial literacy is imperative for financial inclusion. It must be the first stone stepped on. Tools are just that, tools, and they are of limited use to people if they are not aware why they should use it.
Kr: Can you give an example?
GM: Take budgeting, for example. Knowing how to stick to a budget seems commonsensical, but it actually requires an understanding of the concepts of needs and wants, saving for the future, and spending within means. And this is just for budgeting, a seemingly simple skill—what more for something more advanced but absolutely necessary—like picking the right insurance plan?
Being financially literate doesn’t only affect your financial wellness, but also your overall wellness. Money can bring happiness — but only if you manage it well.
Kr: You mentioned financial literacy being imperative for financial inclusion. What is Praxis doing to ensure that the young grow up understanding financial concepts?
GM: With children and youth, we believe you’re never too young to begin learning about money mastery. As adults they will also be better placed to navigate real, pressing situations like financial shocks and workplace financial health with aplomb. As such, we deliver Praxis’ gameplays to people of all ages and backgrounds through schools, financial institutions, and corporates.
Kr: So how do your gameplays address financial illiteracy across ages?
GM: Our gameplays are tailored for the specific audience and messages. Gameplay’s components can be customized to suit the needs of players. For example, a Praxis gameplay for youths might be geared at familiarising players with financial literacy concepts.
Kr: And how “real” are your gameplays?
GM: A key mechanic in the gameplay are the four business cycles of boom, recession, slump, and recovery. When business cycles change in the gameplay, other gameplay elements are affected as well, from salary to insurance premiums and loans. This impresses upon players the volatility of the world economy and shows how individuals are impacted by larger economic movements.
We also build in financial services products into gameplays when needed and this has a big impact for our financial services clients as it means clients can “test drive” and understand the product via the gameplay before they buy.
Kr: How does Praxis ensure your gameplays reflect relevant economic and financial developments in the real world?
GM: We add in customizable breaking news that is flashed on a screen for players. These screens are updated frequently to reflect real-world developments.
For example, in a recent gameplay for Singaporean audiences, we referenced news related to the current US-China trade war, linking it to a phase of recession within the gameplay.
Other sorts of news we use regularly include but are not limited to news of health scares or drastic changes in stock prices, which affect insurance premiums and stocks within the gameplay respectively.
Kr: Praxis was founded in 2001, what about the landscape has changed over the years?
GM: There is certainly more support and interest in financial education now than in the past. When we started in 2001, Singapore had hardly any financial literacy initiatives in place. MoneySense, Singapore’s national financial education program would only launch in 2003.
Regionally, we’ve seen more activity from regulators in recent years as well. Just last year, the Philippines Department of Education (DepEd) and Bangko Sentral ng Pilipinas (BSP) launched financial literacy initiatives, as has the Bank of Thailand (BOT).
But in reality, things are much the same; financial literacy remains a big issue.
Kr: What about Praxis?
GM: In the past five years, we’ve been expanding rapidly throughout Southeast Asia, and in the first half of this year alone, we opened up the first Praxis Financial Gym in the Philippines and expanded into Vietnam, while also acquiring new partners in our other markets, including Singapore and Malaysia.
We also raised capital to support the growth of the company into new markets, continue our excellent research and development and invest in people.
This article is part of KrASIA’s “Startup Stories” series, where the writers of KrASIA speak with founders of tech companies in Southeast Asia.