Why is financial education relevant?
Andrea Beltratti: Financial education may impact individual welfare by helping people to make good life-long economic decisions. Simple actions like budgeting, planning for saving and capital growth, understanding debt and making responsible consumption decisions are crucial to guarantee adequate resources over the life cycle. There are also benefits to society as a whole, i.e. the sum of the part is less than the total: financially educated investors may better allocate their capital towards the best opportunities. Finally, financial education is also relevant to ensure we create an inclusive society, where women and young adults are equally well informed about the best use of economic resources.
What does financial education and financial literacy mean to you as CEO of a globally active bank?
Giorgio Pradelli: Financial education means to understand how financial markets work, including how to earn, save, spend and invest. Today, unfortunately there is still a somewhat negative bias in relation to financial markets. If the functioning of the financial markets was better understood, including how and which risks can be managed, certain prejudices might cease to spread. As a bank, we have a role in helping our clients and particularly those of the next generations gain more knowledge about the financial markets and advise high net worth individuals how to invest in any given market environment.
We therefore want to attract and retain colleagues with a growth mindset, who are future-oriented and have the skills and experience to work hand in hand to understand and meet the needs and expectations of our clients and future clients.
What is the role of policy makers in advancing financial literacy and education?
Andrea Beltratti: Policy-makers have a crucial role to play in improving financial education, first of all through the organization of the education system starting in schools for all ages. Financial education requires a technical understanding of a few key topics and these can be ideally taught in schools perhaps linked to other topics like mathematics, history and literature.
You operate in 40 different locations around the world. What are the differences in the various regions of the world?
Giorgio Pradelli: Indeed, there are differences for example cultural differences in how people trade and invest. And there are also considerable regional differences in how the financial markets are perceived. For example, at the risk of oversimplifying, in Asia people tend to trade more and leveraging their assets is much more common. In continental Europe, people tend to be more conservative, while in Anglo-Saxon countries the equity investment culture is more developed. Of course, digital financial services and mobile banking will make banking more accessible everywhere, including in developing countries. Financial literacy and inclusion are key in the fight against inequality.
What are virtuous examples of financial education actions?
Andrea Beltratti: Italy has a long tradition in financial education initiatives, that have been taken by a number of public and private institutions. Regulation authorities like the Bank of Italy and CONSOB have been trying to offer programs based on face-to-face and distance interactions with learners, and a National Committee on Financial Education has been formed in order to provide general guidelines and to coordinate all the different efforts. More recently, Bocconi University is coordinating a group of Milan-based Universities under the auspices of the PNRR (National Plan for Resilience and Recovery). Among private initiatives I like to mention the Turin-based Museo del Risparmio founded by Intesa Sanpaolo about 10 years ago.
As a father of four, how important is financial education for our children?
Giorgio Pradelli: A strong understanding of how money works is crucial for all children around the world, including my own. The financial markets are the nervous system of our modern society. Everyone needs to understand it. At my house, we discuss topics such as saving, investing and spending actively, but this needs to be complemented by training in schools and at the workplace. Afterall, financial literacy is a key to achieving the UN Sustainable Development Goals.
Register here to virtually participate in the event.