Winter holidays are gone and most European customers have already started to think of their financial resolutions for 2023, after a year marked by inflation and unpredictability.
Revolut, the financial app with 25 million retail customers globally and 2.5 million in Romania, asked the European customers, including Romanians, what are their financial plans and resolutions for the new year[1]. According to a survey commissioned by Dynata, 8,032 respondents from eight European countries, including 1,000 Romanians, will adopt either prudent, balanced or bullish behaviour in 2023.
New Year’s Resolutions – cautious, savvy, or bullish when it comes to money?
Europeans are more concerned with protecting their money, properties (car, house), health and life, in 2023 than investing in new financial instruments or contracting mortgage loans. 27% of the respondents intend to put money aside in savings deposits or vaults, and the Brits are the most interested in these products (36%), followed by Romanians (36%) and French (35%). Women and men share the same level of interest towards stashing money aside, with 27%, while the age segment most interested in saving is 18-24 y.o. (32.7%).
On the other hand, the mortgages lost their appeal among European consumers and only 3% would be interested in obtaining this product in 2023, with the lowest intention in France (0.6%) and the highest in Lithuania or Spain (5.4%) and among the age category 25-34 y.o. (5%). Romanians also are less interested in mortgage credit (1%), while the 25-34 age segment still gives this financial instrument a chance with a higher percentage than the market average in Romania as well (1.50% compared to 1%). The low interest can be explained by both the property regime and the cost of financing the purchase of housing. Romania is the European country with the most household owners (95%, in 2021, according to Eurostat[2]), while Germany has the lowest rate of homeowners (49.5% versus 50.5% renters), the European average being 70% owners vs. 30% tenants.
House (18%) and car insurance (22%), but also credit cards (13%) are the next most considered financial products in 2023. House or car insurance is popular among British consumers (28% and 32% respectively) and with a higher intention of acquisition amongst the 55+ y.o. respondents (25% and 28% respectively).
Credit cards also hold a good position on the Europeans’ list of financial plans in 2023 (13% of respondents intend to acquire one, next year). This type of product enjoys high popularity amongst Italians (19%) and British consumers (18%) and it is preferred by GenZers (17%), the third most considered financial product after savings accounts (33%) and cryptocurrencies (22%).
Although faced with many challenges, the cryptocurrency market remains attractive for investments among the youngest Europeans. 11% of the respondents would intend to invest in crypto in 2023, with the highest intention expressed by the GenZer’s and Millennials (19% for 25-34 y.o. segment). Romanians (21%) and Poles (11%) as well as men (14%) show the most favourable attitude on crypto investments, in 2023.
Education and knowledge are key to the literacy of the new customers in the crypto world, but also to a wider audience willing to understand state-of-the-art financial technologies. Aligned with this trend, in 2022, Revolut launched a dedicated product, Learn & Earn, to increase crypto literacy amongst customers.
As part of our goal to be the safest place to trade, use, and learn about crypto, Revolut regularly communicates with customers about crypto tokens being volatile assets, with prices can change quickly. Revolut believes in widening access to crypto and also recognises that it may not be appropriate for everyone, so the company encourages its customers to research the various cryptocurrencies and the risks and opportunities before buying or selling. Customers should review independent sources and learn the differences between tokens as well as consider their personal circumstances when buying or selling crypto. Cryptocurrencies are unregulated. Funds are not protected and their price is extremely volatile. The tax could be payable on gains.
Cash vs. digital banking
As shown by other studies carried out by Revolut last year, Romanians are increasingly moving towards a cashless economy. This also explains the fact that the average at the national level regarding the intention to hold cash is lower than the European one: 13% of Romanian respondents consider keeping the money under the mattress, compared to 18% at the European level. The highest percentage of favorable responses to this behavior is recorded in Germany (26%), and the lowest in the United Kingdom (11%). At the European level, women prefer cash savings more than men (19% compared to 17%), and the “money kept on the mattress” option is predictably influenced by age – the percentage increases from 15.6% (18 -24 years) to almost 20% (over 45 years).
In Romania, the difference between the two genders in this regard is even greater (16% of women vs. 10% of men), but the averages are lower than those recorded among European consumers, for each gender. Surprisingly, the preference for cash in the age segments is different for the European average, with the younger generation (18-24 years) preferring cash in a higher proportion (18%) than the over 55s (11%). A possible explanation is that older segments of the population are more concerned with saving and more familiar with financial-banking products or investment instruments than the GenZers.
At the local level, Romanians living in the western region of the country are more likely to keep savings in a bank account, with only 8% indicating cash as one of the options to manage their funds in 2023. By contrast, 14% of the respondents from the northeast of the country and Muntenia region are more interested in saving cash. However, the maintenance of a favorable trend for savings and financial tools based on advanced financial technologies is encouraged, in the local market, by the high penetration rate of fintech solutions, such as Revolut, the diversification of the offer of digital banking solutions, including tools for teenagers and children, such as Revolut <18, the generalization of high-speed and stable connectivity services and, last but not least, the growing appetite of consumers for e-commerce, insurtech, cryptocurrencies or commodities, as far as possible accessible in one place, one super app.
[1] These results are part of a larger international survey with over 10,000 participants from 10 countries worldwide (8,032 in Europe of which 1,000 Romanians), which Dynata conducted on behalf of Revolut in October 2022. Sampling frames are based on gender, age, country / region / state. Respondents had to select (multiple choice, maximum 3 answers) from the following: Savings deposits/ vaults; Commodities investments; Cryptocurrencies; Life insurance; Health insurance; Car insurance; House insurance; Private pension; Personal loan; Credit card; BNPL; Mortgage; I keep cash under mattress