Demand-side risks relate to the characteristics and circumstances of consumers and include low levels of financial literacy, high levels of debt, limited digital capability and insufficient income. This chapter analyses the most significant demand-side risks and discusses additional factors that affect consumers’ financial well-being.
Consumer Finance Risk Monitor 2026
Abstract
Demand-side risks relate to the characteristics and circumstances of financial consumers. This chapter analyses the most significant demand-side risks facing consumers in 2025, and the anticipated trends over 2026 (i.e. whether these risks would increase, decrease or stay the same).
Figure 3.1 presents a heatmap of these risks, with the placement of each risk determined by the percentage of jurisdictions that selected it among the three most significant risks stemming from the demand-side (the x-axis), and whether those jurisdictions expected that the significance of the risk would increase, decrease or stay the same in 2026 (the y-axis). It also presents trends from the Consumer Finance Risk Monitor 2024 compared to the current edition, for the top three demand-side risks.
The following key findings emerged:
Low levels of financial literacy are the most significant demand-side risk to financial consumers, identified by 81% of jurisdictions. Respondents generally anticipate this risk to decrease over 2026.
The second most significant demand-side risk is high levels of debt, chosen by 63% of jurisdictions. This demand-side risk driver is anticipated, on average, to increase over 2026.
Low levels of digital capability represent the third most significant demand-side risk, identified by 44% of responding jurisdictions, and are generally anticipated to increase over 2026.
These results are consistent with the Consumer Finance Risk Monitor 2024, in which low levels of financial literacy, high levels of debt and low levels of digital capability were also identified as the top three demand-side risks to consumers. Additionally, although low levels of financial literacy were the most common demand-side risk identified by jurisdictions, they anticipate that this risk will decrease over 2026.
Note: N=59. The x-axis (horizontal) presents the percentage of responses to questions asking for the top three demand-side risks currently facing consumers. The y-axis (vertical) presents responses to a follow-up question asking whether jurisdictions anticipate the risk would increase, decrease, or stay the same in 2026. Risks to the right of the y-axis were selected by more than half of respondents.
Source: OECD Consumer Finance Risk Monitor Reporting Template 2025 & 2023.
Figure 3.1 shows how the significance of demand-side risks varies between jurisdictions based on income levels. Low levels of financial literacy were selected as one of the top three demand-side risks by most respondents in both income categories. High debt levels were also cited at similar rates, selected by 60% of low- and middle-income jurisdictions and 65% of high-income jurisdictions. Conversely, low- and middle-income jurisdictions more frequently included insufficient income (48% versus 15%), financial inclusion (20% versus 9%) and unemployment (20% versus 9%) in their three most significant risks compared to high-income jurisdictions. High-income jurisdictions were more likely to list low levels of digital capability (50% versus 36%) and an ageing population (35% versus 12%) among their top concerns.
Note: N=25 for “Low & Middle” and N=34 for “High.” Percentages show the share of jurisdictions within each income group that selected the risk as one of the three most significant demand-side risks.
Source: OECD Consumer Finance Risk Monitor Reporting Template 2025
Low levels of financial literacy are the most significant demand-side risk. As defined by the OECD Recommendation of the Council on Financial Literacy [OECD/LEGAL/0461], financial literacy is:
A combination of financial awareness, knowledge, skills, attitudes and behaviours necessary to make sound financial decisions and ultimately achieve individual financial well-being.
The OECD/INFE 2023 International Survey of Adult Financial Literacy found that only 34% of adults achieved the minimum target financial literacy score of 70 out of 100, while the average score across all participating jurisdictions was 60 (OECD, 2023[1]).
Similar results emerge from national studies. For example, recent national surveys in Brazil indicate that a large portion of the population lacks basic financial knowledge (e.g. the ability to calculate simple interest), a sign of information and knowledge asymmetries between consumers and financial institutions. In Portugal, although a national financial literacy strategy has been in place since 2011, authorities observed that consumers have limited knowledge of personal pension products, preventing them from understanding the importance of planning and saving for retirement. Findings from the 4th Survey on the Financial Literacy of the Portuguese Population, conducted in 2023 (Todos Contam, 2023[2]), show that a large majority of respondents (81%) state that they will finance their retirement through social security or mandatory contribution regimes, whereas only one quarter anticipate relying on personal savings. Similarly, Italy reported low financial literacy regarding pension products, with many individuals lacking the necessary knowledge to make informed retirement decisions, underestimating longevity risk and post‑retirement needs, and consequently facing greater financial insecurity in old age. In Montenegro, authorities noted that many consumers lacked a basic understanding of investment instruments, simultaneously reducing consumers’ interest in investing and increasing the risk of making poor investment decisions or falling victim to investment fraud.
Many jurisdictions, such as the Philippines, Poland and Romania outlined how low financial literacy directly affects consumers’ abilities to make sound financial decisions. Consumers may struggle to have a clear understanding of the terms, including the risks, of the financial products and services they use. As a result, consumers may struggle to choose the financial products and services that would best serve their needs, and they may even fall victim to scams or debt traps. For example, Slovenia noted that consumers with low levels of financial literacy may be accumulating high-interest debt from loans or credit cards, failing to save for retirement or emergencies, and making poor investment choices (e.g. high-risk products or scams). Further, Uzbekistan highlighted that this is particularly evident in the growth of consumer microloans, where borrowers often undervalue their repayment obligations.
Low financial literacy may contribute to consumer vulnerability or exacerbate challenges for consumers experiencing vulnerability, as individuals who lack the knowledge or skills to understand the obligations and risks of financial products and services may be more easily misled or exposed to harm. For example, in Malta, although existing financial literacy initiatives are improving literacy levels, gaps remain, particularly among older adults and vulnerable groups. These gaps may affect decisions relating to saving, investing, and insurance. North Macedonia reported that many consumers cannot fully understand loan terms, interest rates, or digital security risks, which exposes them to fraud, over-indebtedness, and hidden charges, and that this lack of knowledge can also discourage them from using formal banking products, thereby contributing to financial exclusion. The Philippines is experiencing similar challenges, with many consumers struggling to interpret financial terms or assess risks, heightening their exposure to scams, debt traps, and poor financial decisions.
Financial literacy levels are generally anticipated to stay the same or improve over 2026. For example, according to the Financial Capability and Inclusion Demand Side Survey 2024, financial literacy levels in Malaysia have remained largely unchanged since 2021 amid ongoing issues surrounding the cost of living and digitalisation of financial products (Bank Negara Malaysia, 2024[3]). To address this, Malaysian authorities published the second National Strategy for Financial Literacy 2026-2030 in October 2025, setting priorities to further strengthen financial literacy nationwide (Financial Education Network, 2025[4]).
Other jurisdictions are introducing or further implementing financial literacy strategies and action plans. For example, Armenia developed a National Financial Education Strategy in 2014, which is reviewed every five years based on the results of the Financial Capability Barometer and co-ordinated by the Financial Education Steering Committee, an inter-agency body (Central Bank of Armenia, 2025[5]). Ireland launched its first National Financial Literacy Strategy in February 2025. This is a five-year Strategy with key target groups and clear deliverables through stakeholder activities on financial education (Government of Ireland, 2025[6]). The Banco de Portugal has implemented several initiatives under the National Financial Education Plan, such as the “My Financial Future” competition, developed in partnership with CFA Society Portugal, which served as a creative and engaging way to raise awareness among young people about the importance of responsible and informed financial management. Following a similar approach, Romania launched its first National Strategy for Financial Education in April 2024, together with a five-year action plan that sets out clear objectives tailored to specific target groups, with the aim of improving the overall level of financial education in the country.
The OECD/INFE International Survey of Adult Financial Literacy, Inclusion & Well-Being (OECD/INFE survey) measures levels of financial literacy (covering the dimensions of knowledge, behaviour and attitudes) digital financial literacy, financial inclusion, financial resilience and financial well-being across and within jurisdictions. The international survey allows policymakers, regulators and supervisors to measure key outcomes for consumers and to understand the linkages between related policy agendas.
To date, 59 jurisdictions have participated in the OECD/INFE survey across four waves in 2023, 2020, 2016 and 2012. Thirty-nine jurisdictions, including 20 OECD Members and 8 G20 countries, participated in the 2023 edition. In addition to the financial literacy levels highlighted in Section 3.1, the survey found that on average, across all participating jurisdictions:
In terms of financial knowledge, 84% of adults understand the definition of inflation, but only 63% can apply the concept of time value of money to their own savings.
In terms of financial behaviour, 70% of adults report that they carefully consider if they can afford something before buying it, but only 26% of adults compare financial products across providers and only 24% of adults seek advice from independent sources when purchasing financial products and services.
The average score relating to digital financial literacy across all participating jurisdictions is 53 out of 100 points. Furthermore, only 38% of adults who report managing financial products and services online reach the minimum target score on digital financial literacy.
The fifth wave of the OECD/INFE survey is taking place in 2026 and is open to all jurisdictions to participate. By participating in the exercise, jurisdictions can set a baseline measure (for first-time participants) and monitor trends in the population over time. The results of the survey will also assist policymakers, regulators and supervisors to identify priority areas and groups in need of targeted support at the national level, in order to develop evidence-based policies and initiatives, while also enabling international benchmarking. Results are expected to be published in the second half of 2027.
Sources: OECD (2023), “OECD/INFE 2023 International Survey of Adult Financial Literacy”, OECD Business and Finance Policy Papers, No. 39, OECD Publishing, Paris, https://doi.org/10.1787/56003a32-en. OECD (2026), OECD/INFE Toolkit for Measuring Financial Literacy, Inclusion and Well-Being 2026, OECD Publishing, Paris, https://doi.org/10.1787/92f2d439-en.
High levels of debt represent the second most significant demand-side risk. On average, it is anticipated that this risk will increase in 2026. Jurisdictions underscore that high levels of debt stem from macroeconomic pressures and easy access to credit.
For example, Belgium noted unstable economic conditions and high living costs as major stressors, while Türkiye indicated that high inflation is causing financial consumers to accumulate debt. Finland and Lesotho reported that high unemployment may be contributing to excessive debt levels. In Greece, where unemployment has been falling steadily since its peak in 2013, authorities reported that elevated unemployment rates during the crisis may have contributed to current debt levels, among other factors. Germany cautioned that the lack of economic resources could make certain consumers particularly vulnerable to elevated debt burdens.
High levels of debt may also be driven by the introduction of new products and services that make consumer credit more accessible, a finding that echoes the Consumer Finance Risk Monitor 2024. In particular, the expansion of credit availability through digital channels may contribute to elevated consumer debt levels, especially when coupled with practices that influence consumer decision making such as targeted marketing (OECD, 2025[7]; Izaguirre et al., 2025[8]). Digital credit and credit-like products such as Buy Now Pay Later can further amplify these risks by exploiting behavioural biases, downplaying long-term costs and emphasising short-term benefits, thereby increasing the likelihood of over-borrowing and undermining financial well-being (Maggio, Williams and Katz, 2022[9]; deHaan et al., 2024[10]; Dong et al., 2025[11]; IPA/CEGA, 2024[12]; GSMA, 2024[13]).
For example, Indonesia reported rapid growth in digital credit products, which have expanded household credit access but also heightened financial vulnerability. Similarly, Austria and Sweden noted that the ease of access to Buy Now Pay Later can tempt people to take on more repayment obligations than they would otherwise. Concerns about easy credit availability were also raised by Italy, which highlighted risks from inadequate creditworthiness assessments, and by Malta, warning that simplified application processes and persuasive marketing encourage borrowing beyond capacity. In Romania, a small minority of non-bank lenders are not required to conduct credit bureau checks. This may enable some consumers to accumulate multiple concurrent loans – in extreme cases, more than 10 concurrent loans – risking breach of the 40% debt-service-to-income cap. Additionally, the United Kingdom conducted a consumer survey in 2024, finding that 2.8 million respondents (5%) had persistent credit card debt (FCA, 2025[14]). Türkiye and the United Arab Emirates cited credit cards with high spending limits.
Whether due to macroeconomic pressures or ease of access, many jurisdictions noted that households were increasingly borrowing for daily expenses. For example, in Uzbekistan, individuals increasingly rely on multiple consumer and microloans to cover daily needs, often taking new loans to repay existing ones. Romania reported loans being used for current consumption, such as holidays, electronics, and household expenses. In Israel, households have, in recent years, increasingly used credit, alongside an increase in the cost of living and in interest rates. Authorities from Bosnia and Herzegovina noted borrowing for essentials like heating, food, and education, frequently without the ability to repay. Canada reported that borrowing for daily expenses was more common in 2024 compared to 2019, and the use of payday loans had similarly increased. Mauritius reported a similar trend of households increasingly relying on personal loans or credit cards to manage expenses. South Africa noted that credit had become a “fundamental means of survival” for a significant portion of the population. Ukraine reported that many consumers took out loans not for their own needs, but to repay debts under previous loan agreements.
Several jurisdictions provided concrete indicators to demonstrate evidence of high debt levels or rising debt stress. For example:
Canada reported a household debt‑to‑disposable income ratio of 174% in Q1 2025, which was the highest in the G7.
In Hong Kong (China), the credit‑card delinquency ratio rose from 0.25% in Q1 2023 to 0.40% in Q2 2025, while bankruptcy petitions increased from 7 860 (2023) to 9 190 (2024).
In Kosovo, new household loans increased by 28% in 2024, driven by consumer loans (+27%) and mortgages (+38%).
In Japan, the average unsecured loan balance per person stood at JPY 563 000 as of March 2024, with 1.4 million individuals holding three or more loans (140 000 with five or more), slightly higher than a year before.
In South Africa, the share of people whose income fails to cover one month of expenses rose from 33% (2022) to 41% (2024), and 60% of credit‑active consumers exhibited signs of repayment difficulties (e.g. missing payments), illustrating the link between worsening affordability and debt stress.
Comparative data on household debt as a percentage of disposable income is presented for 25 OECD countries and the euro area in Figure 3.3. Debt ratios vary significantly, from less than 50% to more than 200%. Compared to pre-pandemic levels (Q4 2019), this measure has declined by an average of 13 percentage points across the sample.
Note: Data from Q3 2025 or latest (Colombia = Q4 2024, Greece = Q2 2025, Japan = Q1 2024, Mexico = Q2 2025, and Norway = Q2 2023.
Source: National Accounts at a Glance (NAAG), OECD National Accounts Statistics.
Consistent with the Consumer Finance Risk Monitor 2024, low levels of digital capability were cited as the third most significant demand-side risk. As mentioned in Section 2.2 of Chapter 2, the use of digital technologies and AI in financial products and services is rising at a rapid pace. Several jurisdictions noted that low levels of digital capability is thus a significant demand-side risk driver, as it may limit a consumer’s ability to adequately participate in, and benefit from, an increasingly digitalised financial system. For example, in jurisdictions such as Australia (Australian Treasury, 2025[15]) and Canada, consumers are faced with a decline in physical branches, which could create access barriers for consumers with lower digital literacy (OECD, 2025[16]). Jordan highlighted that capability and knowledge gaps are expected to rise as new technologies emerge and banks increasingly shift towards online and mobile services, reducing reliance on traditional branch-based services. Portugal noted that low levels of digital capability affect less digital-savvy consumers from accessing and managing financial products and services online, including retail banking and investments products and services.
Other jurisdictions (for example, Austria, the Netherlands, Serbia) agreed that low levels of digital capability disproportionately affect some consumers who may be vulnerable, including the elderly and minorities, as this makes their interactions with the financial system and wider economy more difficult. Additionally, jurisdictions such as Greece and Lithuania highlighted that consumers with low levels of digital capabilities may also be at risk of falling victim to financial scams and frauds. In recognition of the importance of this issue, Greece has implemented the National Financial Literacy Strategy. Consumers that struggle with elements of digitalised financial services, such as the use of mobile apps or two-factor authentication, may be more susceptible to scams such as phishing, vishing or smishing, fake websites or fraudulent messages. Among the jurisdictions that identified low levels of digital capabilities as a significant demand-side risk, a significant number anticipate that the significance of this risk will increase in 2026.
Other significant demand-side risks include insufficient income (selected by 29% of respondents) and ageing populations (25%). While other demographic changes and other sources of vulnerability were not frequently identified as significant demand-side risks, jurisdictions that selected these risks anticipate that they will significantly increase in 2026.
3.4.1. Insufficient income
Nearly a third of jurisdictions, including Colombia, Croatia, Malaysia and Zambia highlighted that low levels of income, coupled with cost-of-living pressures in their respective jurisdictions, inhibit household and individual financial management. For example, Brazil noted that insufficient income remains a structural barrier to financial inclusion. Consumers may lack the financial capacity to meet basic needs, which makes it harder to engage with formal financial products in a sustainable way. Of the jurisdictions that selected this risk driver, there is a general anticipated increase in 2026.
3.4.2. Ageing population
One quarter of respondents, including Australia, Hong Kong (China), Ireland, Italy, Japan, Mauritius, the Netherlands and Singapore identified ageing populations as a significant risk. Some of these responses highlighted the potential negative impacts of ageing populations on the pension and insurance sector, as well as the generally low levels of digital capability among this subset of the population. Of the jurisdictions that selected this risk, many anticipate that it will increase in 2026.
3.4.3. Other sources of vulnerability
A common theme that emerged from these demand-side risks is that they can deepen financial harm for consumers experiencing vulnerability (e.g. the elderly, rural populations, migrant communities). For example, the United Kingdom reported that close to 14% of the population found it difficult to access a branch using their normal forms of transport, and 58% of adults in poor health had issues managing their finances or interacting with providers due to those health issues (Financial Conduct Authority, 2024[17]). In South Africa, roughly 70% of adults saw their financial circumstances stagnate or deteriorate in 2024 (Finmark Trust, 2025[18]).
The OECD report Understanding and Responding to Financial Consumer Vulnerability presents a conceptual framework for understanding financial consumer vulnerability. It highlights that vulnerability is rooted in a mix of personal traits (consumer characteristics), personal situations (consumer circumstances), how financial markets are structured (market characteristics), and how financial service providers operate (conduct and culture of firms). It also highlights policy considerations and responses to address this issue, which is closely linked to financial well-being (OECD, 2025[19]). Experiencing financial vulnerability, especially over an extended period, can negatively impact overall financial well-being, as it can limit the ability for financial consumers to remain resilient to shocks and can prevent them from meeting their financial goals.
References
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[3] Bank Negara Malaysia (2024), Financial Capability and Inclusion Demand Side Survey 2024, https://www.bnm.gov.my/documents/20124/17493532/ar2024_en_box4.pdf.
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[1] OECD (2023), “OECD/INFE 2023 International Survey of Adult Financial Literacy”, OECD Business and Finance Policy Papers, No. 39, OECD Publishing, Paris, https://doi.org/10.1787/56003a32-en.
[20] OECD (n.d.), Recommendation of the Council on Financial Literacy, https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-0461 (accessed on 15 December 2025).
[2] Todos Contam (2023), Survey on the Financial Literacy of the Portuguese Population 2023, https://www.todoscontam.pt/pt-pt/inquerito-literacia-financeira-da-populacao-portuguesa-2023.