Financial education: gaining the freedom to make informed choices thanks to education

The digitisation of financial and insurance services means it is increasingly important to manage one's personal finances, create a budget, save for retirement and avoid becoming a victim of financial fraud. In this context, financial education is key to making informed choices not only for adults, but also for the young and the very young.

The development of fintech has furthered this trend, making payment, asset management and financial instruments more accessible to people of an increasingly young age. According to the latest report from app marketing expert AppsFlyer, downloads of financial and banking apps rose by 132 per cent between June 2019 and June 2021, with 29 of the top 40 financial markets (by app installations) seeing growth of at least 20 per cent year-on-year.

While access to financial apps and platforms is growing, financial literacy still remains low. The OECD/INFE 2020 International Survey of Adult Financial Literacy shows that roughly half of the EU adult population does not have sufficient understanding of basic financial concepts. Even though the overall figures are low, the problem is more acute in certain parts of society, with the most vulnerable disproportionately affected. Low-income groups, for example, as well as women, young people and the elderly, tend to score lower than the rest of the population when it comes to financial literacy.

In the US, according to the P-Fin Index survey released last October by the TIAA Institute and the Global Financial Literacy Excellence Center (GFLEC) at the George Washington University School of Business, financial literacy in the US is low within each of the five generations: Silent Generation (those born in 1945 or earlier); Baby Boomers (those born between 1946 and 1964); Generation X (those born between 1965-1980); Generation Y (those born between 1981-1996); Generation Z (those born between 1997 and 2002). The survey also shows that while financial literacy tends to be higher among 'Baby Boomers' and the 'Silent Generation', the average percentage of questions answered correctly is only 55 per cent within each group. Among Generation X, Generation Y and Generation Z, the percentage of correct answers on the P-Fin index drops to 49 percent, 48 percent and 43 percent respectively.  

In its Global Week Money Annual Report 2021 published at the end of September, the Organisation for Economic Co-operation and Development (OECD) underlines that "after a global financial crisis and in the midst of another global social and economic crisis, after more than 20 years of research, policy making, implementation and advocacy, not only is financial education globally recognised as a key element in a trilogy meant to empower financial consumers, alongside financial inclusion and financial consumer protection, but it is considered an essential life skill that all, from young to old, should possess."

Financial literacy is therefore a necessity that benefits not only individuals, but countries in general. According to the OECD, countries that have promoted financial education have also strengthened regulation and implemented reforms to protect their citizens, with financial education and regulation now going hand in hand. In terms of financial education, European countries have already embarked on a more systematic and streamlined path.

In its November 2020 report, the European Banking Federation (EBF) noted that 35 European countries were taking part in the European financial literacy movement, with around 125 separate initiatives across Europe to promote financial education and strengthen financial literacy.

In 2017, Italy set up the National Committee for the planning and coordination of financial education activities and since 2018 has been organising the "Financial Education Month" held every October.

This year again, Generali has actively participated in the initiative and is aware that it will represent one of the key pillars for post-Covid economic and social recovery. The Group has promoted a series of eight meetings for the 2021 edition of the Financial Education Month on the issues of greatest interest to students, families, savers and organisations, to explore how to approach timely and mature planning for pensions, insurance and financial management. The meetings were held via digital platforms with the participation of several professionals from Assicurazioni Generali, Alleanza Assicurazioni, Generali Investments, The Human Safety Net and its partners.