Italians have always been fond of their current accounts , which are often also used for savings management. And it is not a novelty that ours is one of the countries in which the use of cash is still very (too) widespread. But how much does this cost us?
Italy confirms itself as a structured country based on solid personal savings , based on 1396 billion in bank and postal savings, of which, according to data provided by the Bank of Italy, as many as 960 billion for the families of the “Bel Paese”. A trend that seems to have no end and that over the last few years has caused Italian investors to miss significant opportunities.
An explanation to this phenomenon and some of the reasons it comes from has been given in the last days by Guido Tirloni, senior manager of Kpmg Advisory. Tirloni explains how uncertainty and lack of confidence in the future of Italian families are undoubtedly among the main reasons. To this must also be added a poor financial culture and the lack of confidence in the tools that allow access to these services, unlike for example the Anglo-Saxon families, more accustomed to investing in the financial market. This mix is the main cause of the recorded growth of almost 5% on the total amount of liquidity present on Italian current accounts .
The cost of liquidity
Keeping money on the current account obviously costs, even if we choose to use an online current account:
- Recent studies show that the annual balance (ie the difference between total costs and any interest paid on account balances) in the current accounts of small investors (under € 20,000) is often negative.
- Another additional cost, even if hidden to most, is inflation . As this increases, the purchasing power of our money, left without profit on the current account , decreases.
Moreover, the bank account is certainly one of the most well-known and widespread financial instruments. The convenience of being able to use it from home via the Internet, without having to go directly to the counter and with security levels deemed appropriate by the customer, allows a large number of people to benefit from many services for the management of the duties of daily life. The situation is different when it comes to investments or simply saving: keeping large sums on the current account may not be a good idea. Among the qualities of current accounts there are certainly no profit margins and the possibility of investment.
The other side of liquidity
Having cash on your current account also allows many Italians not to have to divest of savings instruments with all the related problems. Certainly, as already mentioned before, there is a great problem of financial culture in our country. It should also be noted the great “attachment” to cash in Italy, which is not the case in the first places in the world for intensive use of cash . The study carried out by “The European House-Ambrosetti” shows that only Qatar, the Czech Republic and Guatemala are worse than us in the world. To discourage the use of cash, for example, one could try to reduce the number of ATMs, a practice already adopted in many countries that wanted to adopt a policy that encouraged the use of electronic money. Again from the Ambrosetti study, it can be seen that in Italy from 2008 to 2016 the value of cash withdrawals from ATM has increased at an average annual rate of 8.9% against 2.3% in Germany and 2.5% in France.
The effect of the European directive
Finally, there is also the impact on the cash present on our current accounts that will have the PSD2, the European directive that aims to create a kind of single market for the payment of services and that will naturally change the habits of lot of. According to many, the changes promised by the PSD2 will occur, even if they will be less rapid than one might think. The PSD2 will impact mainly on those who already use alternative payment instruments, while for the short term those who are still attached to the dear old banknote will have a minimal impact. The path that the PSD2 intends to trace will be long and it will be necessary that even the smallest stores, as well as the large chains, begin to equip themselves to be ready to receive even small amounts of money not necessarily with cash. Italian banks are moving fast to avoid being caught unprepared. We will see developments in the coming months.