[Economy Pulse] Financial Education Is Not a "Cost" but an "Investment"

The Growing Importance of Voice Phishing Prevention Education
An Essential Investment to Reduce Social Costs

Recently, a Korean university student was detained and killed in Cambodia after becoming involved with a domestic voice phishing organization. This incident has once again highlighted both the increasingly global and sophisticated nature of the voice phishing crime ecosystem and our vulnerability in preventing such crimes. The fundamental problem is that we are consistently reluctant to invest in prevention, only pouring budget and manpower into fixing the problem after an incident occurs. Our response remains heavily focused on post-incident measures. While investigations are conducted after the damage has occurred, and victims wait for reimbursement of economic losses and suffer from psychological stress and anxiety during dispute resolution, the collapse of financial consumer trust and the skyrocketing social costs for investigation, insurance, dispute mediation, and subsequent recovery continue to grow. The most effective way to block voice phishing is through proactive financial fraud prevention and experiential education. A single preventive education session can reduce the social costs of investigation, dispute, and recovery many times over.

Such financial education is often underestimated because it falls under the invisible domain of 'prevention.' However, when evaluated using performance measurement methods such as Social Return on Investment (SROI), financial education clearly reduces social costs by lowering delinquency, voice phishing damage, and high-interest loan usage, while increasing rational borrowing and reducing unnecessary spending.

For example, let us assume there are 10,000 cases of voice phishing annually, and that education and campaigns prevent 10% of them. Considering that the 'average damage per case' of voice phishing in the first quarter of 2025 was about 53.01 million won (according to police reports), and assuming an average damage of 50 million won per case, preventing 10% of 10,000 cases would reduce direct damages by 50 billion won. In addition, if we estimate the average loss in mental health and productivity after victimization at 200,000 won per case (based on counseling and absenteeism), and apply the 10% prevention effect, this would result in an additional social cost reduction of 2 billion won.

The value of financial education lies in changing behavior. It is an infrastructure that goes beyond knowledge to transform actions. When consumers compare products after receiving education, set up automatic savings, recognize the importance of not clicking on voice phishing links, and practice brief actions such as pausing for three seconds before clicking a link or confirming with family or colleagues for one minute before transferring money to an unfamiliar account, they can prevent damage, reduce delinquencies, and save on unnecessary fees and interest. Such behavioral changes lead directly to cost savings and risk reduction. Therefore, for financial education to be meaningful, it must be designed to change small decisions. The effect of education does not stop at knowledge but translates into action, resulting in immediate financial outcomes. In other words, the cost of education is an upfront investment, and the reduced social costs are the returns.

Performance measurement must also be clear. By comparing the incidence rate of damage, delinquency rates of over 90 days, and the average reduction in interest rates due to refinancing or comparison shopping before and after education or between similar groups, and then multiplying each by the average damage amount, delinquency burden, or interest rate spread, the results can be converted into monetary value. If we conservatively deduct the contribution of factors outside education (attribution), changes that would have occurred even without education (deadweight), and the portion of the effect that diminishes over time (drop-off), we can derive a feasible estimate.

Financial education is a core area of financial consumer protection, serving as a means to demonstrate how much social value the changes we create (impact) have generated. Therefore, it is not an expenditure, but an investment that reduces social costs and increases overall welfare.

Jung Unyoung, Chairman of the Finance and Happiness Network