Knowledge and understanding will make us the leaders of tomorrow. Financial education is Italy’s next challenge

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2 septembre 2021

It’s like having a car without a driver’s licence. This is the simplest way to describe the structural gap in Italy – not all of it, but a large portion – when it comes to financial knowledge and the ability to wield this tool in order to actively master one’s personal finances. A survey on financial literacy conducted by the Bank of Italy in the first 2 months of 2020 showed that financial knowledge was lacking. Italy ranked second to last, just barely above Malta, in an OECD survey of 26 Countries, including 12 members of the Organisation for Economic Co-operation and Development, a tangible sign of the extent to which financial education is still a foreign concept and an underused tool in the Italian culture. Covid-19 only made this worse, aggravating the situation and creating even more uncertainty for the economic stability of households, highlighting the lack of expertise in addressing the new challenges of today.


The OECD defines financial education as “the process by which consumers, savers and investors improve their understanding of financial products and concepts; through information, instructions and advices, they are able to develop the skills and confidence to become more aware of the risks and the opportunities to make informed choices, to know where to go for help, and to take effective actions to improve their financial wellbeing”. To put it simply, financial education is the process that gives a purpose to money or, in a certain sense, that puts a “name” on it. Through financial education, terms like BOT, BTP and surety or concepts like “simple versus compound interest” or the notion of “risk/return ratio” are no longer incomprehensible and instead become clear pieces of knowledge to better deal with the present and carefully, knowingly plan for the future.


According to the Bank of Italy research, the two socio-demographic variables that most influence financial literacy are age and education. Looking at these two variables, we see that financial literacy peaks among 40-year-olds, while younger people, who “appear less attentive than others to the aspects of precautionary savings”, and those over 50 are less competent. The other most significant variable considered in the research is education. The Bank of Italy report shows that financial literacy improves with education. The fact that only about 20% of Italians hold university degrees, compared to a European average of over 33% (source: ISTAT), has a considerable impact. The range of population with the most financial expertise is therefore the most educated one, between 35 and 44 years of age. A Doxa-Edufin research confirms these findings, showing that the lower a person’s level of education, the lower their financial literacy and the more worried they are about their financial situation.


Two drafts of legislation have been proposed in the Italian Senate to include financial education in the civics courses taught in primary and secondary schools. The idea is to narrow the gap between Italy and other OECD Countries when it comes to personal finances, savings and investments. The policy makers behind the legislation see school as the best conduit in order to develop aware and well-trained citizens who are capable of facing the challenges of the future and drawing on modern-day expertise in savings, investments, retirement funds and insurance, thus creating a pro-active and aware population.
Financial sector events will also be crucial for this kind of training, and financial education will be the focus of the next edition of Salone del Risparmio, the largest financial sector event, which will be held in Milan at MiCo, the Milan Convention Centre from 15 to 17 September. The event will give various market players the chance to share their experiences and new ideas, forge new partnerships, refresh their knowledge on legislative, tax and operating aspects concerning the investment management industry and talk with financial experts and representatives of institutions about financial education.

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