Santalucía, the leading family protection insurer, presents the Santalucía Group's 4th Corporate Innovation Trends report. This time it's about the I Santalucía Report on Trends and Innovation in Savings and Investment, prepared by the Corporate Innovation area of the insurance group in collaboration with Vecdis, a strategic Research & Advisory consultancy focused on innovation.
The main objective of this report is to know and interpret the importance of a correct financial planning. This will help the population to set realistic goals and to make more responsible and informed decisions about their investments and family economy.
The report focuses on young people and adults aged 18 to 34, who face great economic uncertainty and, therefore, have some traditional financial product intended for savings or investment.
In this context, it is important to provide financial education tools adjusted to new habits of information consumption and offer innovative savings solutions in the medium and long term that help these people to achieve their financial well-being.
Financial education in Spain and in the new generations
Currently, between 45-54% of the Spanish adult population knows how to answer basic financial questions, which places Spain among the European average in terms of financial education.
Young people aged 18 to 34, however, are the generation that knows the least basic concepts. In fact, most of them don't even seek professional advice when it comes to saving or investing. This is where social networks and specialized financial applications begin to gain relevance.
As a result, there are companies that have promoted initiatives in the area of financial education that make it possible to establish new trends between these new generations. Some of them are:
- Mobile apps
- Social networks
- Artificial intelligence
- Ecosystems
- Gamification
- New types of content
Innovative initiatives that help improve financial education
They exist traditional financial institutions that are developing synergies with education giving rise to innovative programs to improve education and the competitiveness of new generations.
From the insurance sector, for example, the documentary stands out “And to me what the money” produced by the Santalucía Institute, the research and debate platform of Santalucía Seguros. It addresses, over 7 chapters, the needs and effects of Economic and Financial Education on young Spanish people.
The Santalucía Institute also has a specific area of your website dedicated to financial education, which includes different types of content focused on the needs of different generations. In addition, among the entity's latest initiatives, the recent launch of a metaverse for financial education for young people between 14 and 30 years old.
For her part, the manager of the insurance company Santalucía, Santalucía Asset Management, also makes your project available to users. #EscueladeinversiónSLAM offers different resources in different formats for those who wish to expand their financial education.
Other success stories based on innovation are Balio, Livetopic Academy, OpSeeker or Bit2Me.
Planning, financial advice and savings rules
The Spanish population's need for savings and investment has been aggravated by the Covid-19 pandemic and by global economic uncertainty. In fact, his savings capacity is being reduced; although the savings rate of Spanish families was 11.4% of gross disposable income (RBD) in 2021.
Even so, it is important to keep in mind that The age of the population influences their financial behavior. For example, centennials and millennials have a moderate savings profile, but the rest of the generations are more conservative.
For this reason, and more so at times of inflation, there are some commonly known savings rules which the population usually uses to reduce their expenses and plan their finances. Some of them are:
- Rule 50/30/20
- Method of the 6 envelopes
- Kakebo Method
The insurance sector and its savings products
To channel the savings generated there are a wide variety of financial products focused on helping people achieve their objectives, differentiating those of the insurance sector and those of the financial sector.
Insurance savings products
- Deferred Capital Insurance: in exchange for a single contribution or for periodic contributions, the insurer undertakes to provide the borrower with capital after the established deadline.
- Income insurance: The policyholder makes a single contribution or several over a period of time and after that period, the insurance company returns an income to him. Depending on when that income is collected and the period of collection, a distinction is made between: immediate annuity insurance, deferred annuity insurance and temporary income insurance (immediate or deferred).
- Individual Systematic Savings Plans (PIAS): deferred annuity insurance in which the policyholder, in exchange for a series of periodic or single contributions, obtains interesting tax advantages provided that he meets the contribution limits and that at least a period of five years has passed between the start of the first contribution and the collection of the annuity.
- Individual Long-Term Savings Insurance (SIALP): emerged in 2014 as term savings insurance with tax advantages if 5 years elapsed between the making of the contribution and the collection of the capital. It is also subject to quantitative limits on contributions.
Unit Linked Insurance
Los Unit Linked They are life insurance in which The investment risk is borne by the borrower of the insurance and, in addition, it has additional capital in the event of the death of the policyholder. The profitability of these products is not guaranteed when the client's contribution, which is not intended for hedging risks, materializes in baskets of investment funds or financial assets.
The investor will make his decision based on his risk profile. According to data from Unespa, both at the end of 2021 and at the start of 2022, unit-linked insurance is the one that shows the most positive behavior in year-on-year terms, increasing assets under management, in 2021, by 23.5% to 19,764 million euros. At the beginning of 2022, they increased by 18.78%.
Some examples of these insurance policies in the Spanish market are Unit Linked CaixaBank, Unit Linked Santalucía or Unit Linked Santander.
Financial sector savings products
There are a wide variety of savings and investment products, and more and more people are they are interested in any of these products to move their money and make them profitable. According to data from the Banco de España, the total financial assets of Spanish families have been increasing considerably since 2002 where they registered around 27 billion euros, until 2020 when around 63 billion euros were registered.
These are some of the main financial savings products which could highlight:
- Paid accounts
- Fixed-term deposits
- Pension plan
- Investment Funds
At this point, the manager of the insurance company Santalucía, Santalucía Asset Management, offers a wide range of products depending on the customer's objectives or investment profile. In addition, its new investment simulator provides the user with an estimate of potential profitability according to different scenarios based on a series of variable characteristics to be defined by the user.
What are the new trends in savings?
Microsavings
The concept of 'microsaving, microsaving, automatic saving or rounding', is characterized by periodically making small contributions to an investment fund. The objective is that the amount that is saved, even if it is not very large, can generate greater profitability.
Santander Piggy Bank, Evo Piggy Bank or BBVA Rounding Account These are some examples of Spanish microsavings applications.
Savings apps with artificial intelligence
Las savings applications powered by AI, which are intended to help the user save, are increasingly common.
These are tools that, thanks to intelligent technology, analyze the income, expenses and savings data of their customers. Based on that information, applications make recommendations on how much the user should save every month.
In Spain, a the Caixabank app and its website would be an example of an app that helps its users to save.
The Spanish investor profile and investment to boost savings
According to data collected by Bestinver and IESE, 77.4% of Spaniards indicate that their The priority when investing is to minimize your losses, rather than generating profitability. This data shows that the Spanish population has a risk aversion profile.
At this point, factors such as the increase in the price of energy, the deterioration of GDP or inflation require that The population better plan their financial future. And this is where new emerging trends, with the help of traditional investment products, can help consumers extract the maximum return on your savings.
As for the current situation of the investment products market, although the population is generally leaning towards a conservative investment in traditional products, investment trends have started to modernize.
In fact, the investments in real estate other than those of the usual residence are 43%, which shows that Spaniards are going beyond risk-free investments and are beginning to change the general trend.
Los digital assets such as cryptocurrencies and NFTs, represent a very low percentage of Spanish invested assets (1.9% of investments). However, we can already see the potential of this trend.
As can be seen, the sector is currently in full transition to the digital environment. Therefore, the most relevant trends with respect to customers, operations and technology:
- Robo-Advisors
- Socially Responsible Investment (SRI)
- Metaverse and Digital Asset Investment
- Embedded products
- Cybersecurity
- Behavioral Analytics
Emerging startups
Las startups focused on investment are playing a leading role in the wave of innovation that the sector is going through. Some of the following are mentioned success stories:
In short, the widespread belief that existed years ago that estate planning was intended for those with high purchasing power ceases to matter.
Solutions focused on microsavings are becoming widely established among the population, and the metaverse and investment in digital assets are among the emerging trends with the greatest long-term potential.
This means that, thanks to new emerging platforms, Access to new savings and investment solutions is being democratized.
