We can read, but can we consider ourselves financially literate?

Many consumers have access to loans, mortgages, lines of credit and credit cards. But do borrowers really understand what they're signing? Do they read and understand the small-print fees? Do they view credit cards as the gateway to easy cash or, worse, easy credit?

There's no question that financial illiteracy in advanced economies - and the lack of consumer protection for those who suffered - contributed to the global financial crisis.

But what about Asian economies?

Financial literacy means knowing what products and services exist and how best to use them. Consumer protection is at the core of financial literacy. Making the right decisions not only affects household welfare but also contributes to greater economic stability in general. At all levels, the need to know even rudimentary finance is essential for daily life.

That's why financial education must start early and continue through adulthood. A proper mix of financial access and education offers a foundation for better market conduct and prudential regulation.

As the finance system spreads, we will likely see more mobile and branchless banking; electronic retail payment systems; streamlined remittance structures; and deeper financial infrastructure in creating financial identities, data flows and building legal frameworks for secured lending.

But underlying these innovations is the assumption that consumers trust them.

Understanding the benefits and pitfalls of new financial products and services is vital, as a financial product that is used but not understood ultimately cannot work. It is the core of financial stability.

The Asian Development Bank emphasises the three I's - Innovation, Inclusion and Integration - as a way of moving the development agenda forward. This is central for financial literacy as well.

Innovation is in Asia's blood. In many cases, non-bank innovation has led the way in bringing new products to traditional financial vendors, leaving financial institutions playing catch-up. Policymakers face the challenge of how to regulate and guide this evolution so that it reaches the unbanked.

Inclusion means bringing financial services to the 70-80% of Asean adults who remain outside the formal financial system. Bringing banking to the unbanked must be accompanied by equitable and transparent consumer protection such as "proportionate regulation" that tailors the regulatory burden to the risk characteristics of business and creates incentives for future financial inclusion.

When it comes to Integration, in addition to many global and regional forums, there are the Alliance for Financial Inclusion and the Consultative Group to Assist the Poor. Financial inclusion was on the G20's agenda in St. Petersburg last week and the Asean Financial Literacy Conference in Brunei this week. It will be taken up by the Apec Finance Ministers' Meeting on Bali next Friday.

Financial inclusion cannot work without financial literacy. It is essential that no one be excluded from the process or left vulnerable to the subterranean world of phishing, spam and scam.

That is why Asean must confront the increasingly complex world of migrants, foreign workers and remittance structures within Asean itself. The Asean Economic Community is fast approaching its 2015 deadline. And while the free flow of goods, services, investment, capital and skilled workers are vitally important, Asean must deal with unskilled workers as well.

Both remittances and savings of migrant workers represent a huge untapped market. Regulators should promote shifting away from cash-to-cash to focus instead on account-to-account transfers.

Financial education accompanied by regulation at both ends to increase awareness and strengthen financial literacy will leave a healthier, more stable financial system and a greater circle of people better equipped to benefit from it.