Post-Covid Era: savings management and digital finance

The Covid emergency has increased the Italians’ savings trend, according to Censis, and nowadays the private wealth is nine times as much as a Marshall plan. Investment trends include ESG (sustainability) investments and digital finance

05 Aug 2020

The private wealth of Italian families increased by 34.4 billion euros in the worst three months of the outbreak (February-April): a figure almost equal to the value of the controversial Mes plan for Italy. Such resources join the 121 billion euros of liquidity gathered in the last three years, before the outbreak of the pandemic (+8.4% in real terms over the three years): a figure equal to nine times the resources of the Marshall Plan allocated to our country for the post-war reconstruction, compared to current values. 

These are some of the data resulting from a survey carried out by Censis for Assogestioni, the Italian association of asset management, aimed at depicting the situation and trends in savings in Italy in this first part of the year, affected by the pandemic. The data show that fear and vulnerability make Italians even more likely to save and less so to risk: for the near future, 34.1% of Italians consider liquidity to be the main instrument for their protection, together with the expansion of the public welfare system (34%) and the purchase of insurance, health insurance and supplementary products (18.6%). 

Alongside caution, however, attention seems to have grown to innovative Esg (Environmental, Social, Governance) financial instruments, based on responsible investment criteria: 52.3% of Italians are interested in such instruments (68.2% among graduates, 70.2% among executives and middle managers). A desire for sustainability that is now linked to health protection and prevention, having sprung to the forefront of people’s priorities with the health emergency.  

Digital finance: crowdinvesting is growing 

The focus on innovative financial instruments seems to be confirmed by the fifth Italian Report on Crowdinvesting carried out by the Osservatorio of the School of Management of Politecnico di Milano, according to which crowdinvesting (digital finance for businesses) in Italy has not been slowed down at all by the pandemic and as of June 30, 2020 it is worth twice as much as in 2019, in fact, the total funds disbursed amount to 908 million euros compared to 517 a year ago. 

In particular, the equity crowdfunding (online fundraising by startups and innovative SMEs that allows investors to transfer money in exchange for shares in the company) has reached 159 million (82 in June 2019 and had already doubled the 2018 figures). 

Lending crowdfunding reached 749 (410 loans to individuals and 339 to companies) compared to 435 in 2019, twice as much as in 2018. The last 12 months alone accounted for a record figure of 390.8 million euros, 76.6 million euros in equity (49 the previous year) and 314.2 million euros in lending (207), with a growth rate that does not disfigure Italy compared to other European countries, even if the gap in volumes is still significant. It is also worth mentioning the significant growth in real estate: specialised equity portals have disbursed resources of 19.5 million euros in the last 12 months, lending resources of 29.2 million euros (48.7 million in total), almost three times more than in the previous period. 

Of course, although growing, the crowdinvesting segment remains a niche – ‘for experts’ – compared to the volume of Italian savings capital that could be moved. 

As the Censis survey suggests, Italians feel a strong need for protection in the near future because liquidity is a suitable instrument to guarantee their lifestyle and daily life needs in the event of a general and personal economic situation worsening. They give up planning in favour of liquidity ready to face the ‘anything can happen’ approach in daily life. The need for protection, however, is expected to lead to greater resort to the purchase of insurance, health insurance and complementary instruments; perhaps, for the same purpose of seeking stability, there has also been a considerable growth in the real estate segment within the crowdinvesting sector. 

Financial education for Italians 

Feelings of caution and anxiety are aroused in a population, the Italian one, which is well-known to be poorly educated in financial matters and therefore struggles to grasp the whys and wherefores of savings management. 

A BVA-Doxa survey has measured the financial health of households and understood the most critical areas in terms of resilience and financial skills, discovering several interesting aspects. 

For example, since the beginning of the COVID-19 emergency, about 4 out of 10 households claim to have completely or partially reconsidered their long-term goals. In addition, one in four households report not having medium to long term goals. 35% of interviewees say they feel worried about their financial situation. About one in two financial decision-makers assess this emergency situation as a serious threat to their financial well-being. 

However, low financial literacy seems to have a negative impact even on the use of public aid provided by the state, let alone how it can affect more complex choices that require an investment, for example a pension insurance policy: only 27% know what longevity risk is and less than half of the sample (45%) know about supplementary pension instruments. 

Savings management is one of the main focuses of the seventh edition of the international contest promoted by BNP Paribas Cardif in partnership with InsuranceUp, this year featuring Next Normal, the future after the pandemic. Innovative ideas, solutions and products are therefore sought in all areas of people’s lives.  Applications are open until September 30th, apply here. 

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