Individual's Financial Literacy, Pros and Cons of the Digitalization in the Financial Industry within European Union

L'educazione finanziaria degli individui e i pro e i contro della digitalizzazione nell'ambito delle scelte finanziarieNowadays, the access to Financial Markets is no more in the hands of traditional financial institutions. The emergence of FinTech companies leads to decentralization of the Financial Industry thanks to new digital financial products and services with lower costs for customers than long-established financial intitution. Another positive effect of FinTech companies is the increase level of competition that forces traditional companies to innovate their business models and value chain processes. However, it is "not all that glitters is gold". A decrease in the level of financial market concentration as well as a decentralization of financial industry result also in an increased number of risks (cyber and not) in which retail investors could incur, especially inexperienced, financial and digital illiterate individuals. The questions for which this work (composed of 5 chapters) tries to give some data-driven answers are related to the above introduction. In particular, the focus is on the Wealth Management services, which sub segments are Digital Investment and (traditional) Financial Advisory segments, in the European Union. The first two are dedicated to the literature review about the most important literature evidences linked to Digital and Financial literacy of individuals of EU countries. Moreover, there is a focus on the role of FinTech companies and the tremendous trust placed by people on the majority of these companies. Additionally, there are some evidences that the algorithm employed inherit some of human biases. The third chapter has as outcome a new theoretical model that qualitatively explain the role of several factors (digital and financial literacy; trust placed by individuals on financial institutions, risk tolerance of individuals; the role of investment experience; the role oh human and digital financial advisors; individual's cognitive biases and personal traits) on the final investment decision of a retail investor. The fourth chapter is about the data analysis and it describes the evidences about the asset managed by Wealth Management services, in relation with the level of digital and financial illiterate people. The fifth chapter outlines the findings related to the data analysis: - technology is an enabler and it cannot fully replace human judgment; - the higher the level of financial literacy, the higher the interest towards Digital Investment services; - human biases play a role in the final investment decision and the return on investment linked to a choice ("Dunning–Kruger effect"); - the more the number of people with at least basic digital skills, the more is the demand for Digital Investment services; the more is the demand, the greater is the Penetration Rate; - a country with high share of digital literate people will be more likely to decrease the amount of digital illiterate people in the future.