According to the latest "FinTech Survey in the Italian financial system - 2023" conducted by the Bank of Italy, the finance technology sector in Italy could attract over 901 million in investments for the two-year period 2023-2024, in order to purchase innovative technologies for grow. While, in the two-year period 2021-2022 it amounted to 600 million euros. Furthermore, further investments of 380 million euros are planned starting from 2025, until the projects are completed. The total flow of investments associated with the projects surveyed, reports Bankitalia, is 1.88 billion euros. In the two-year period 2023-2024, spending increased 3.8 times compared to 2017-2018 even if "the process of digital transformation of the financial system, although expanding, is quantitatively limited and polarised".

This increase in investment is reflected in the advancement and adoption of key technologies that are shaping the fintech landscape. Among these, web-mobile platforms stood out, attracting 20.5% of investments. Closely followed by artificial intelligence (AI), which captured 16.5% of investments, and Application Programming Interfaces (APIs), which obtained 14.9%.

Focusing on the main business areas, financial intermediation emerges as the most financed sector, absorbing 43.7% of total investments. Payments are not far behind, with 39.4% of investments, highlighting the growing importance of these two areas in the fintech context.

In the world of payments, Instant Payments and integration into digital wallets represent the main trends, reflecting a change towards faster and more integrated transactions. In financial intermediation, however, the focus is on the digitalisation and automation of credit processes, marking a significant step towards operational efficiency and the reduction of processing times.

Like any innovation, however, the adoption of these technologies is bringing with it opportunities and challenges. A reduction in fraud is among the most obvious benefits, thanks to the use of advanced technological solutions. However, this shift towards the information technology side outsourcing also entails an increase in risks related to security and data management, underlining the need for a balance between innovation and cybersecurity in the fintech sector.

Finally, looking to the future, and above all to the new generation of entrepreneurs and professionals in the industry, the report also emerges that, over the last year, there has been an increase in the number of fintech startups in Italy which have brought innovation and change to the sector and particularly in the field of digital payments, where many of them develop electronic wallets, payment applications and money transfer services. Even in the lending and loan segment, these companies offer proposals ranging from online loans to alternative financing solutions. Blockchain technology and cryptocurrencies represent another area of ​​strong growth. Finally, some startups stand out in the digital asset management sector, offering automated financial advisory services, also known as robo-advisory.

Another important fact for the growth of the startup ecosystem in Italian fintech is also the increase in collaborations with traditional banks and other financial institutions which is becoming more and more frequent. However, when entering a more traditional collaborative context, startups quickly find themselves facing significant challenges. Among these, regulation and compliance, competition, and building a relationship of trust with customers represent the main obstacles on which these young excellences will have to keep working in order to continue innovating the market.

According to the last report on the Buy Now Pay Later adoption and perception in the European B2B sector, presented by Opyn and Ipsos, 98% of Italian companies consider Buy Now Pay Later in the future of digital payments and 65% are already oriented towards evaluating the adoption of solutions made possible by digital for deferred payments.

“We are among the very few European fintechs focused on the B2B sector - explained  Greta Antonini, Chief Marketing & Communication Officer at Opyn - and for this reason we introduced our Opyn Pay Later service over a year ago, which we also made available abroad, in 5 languages, for merchants and buyers at the beginning of 2024. Today we observe that the Buy Now Pay Later model is consolidating as a payment solution for businesses. With this research we wanted to try to measure this phenomenon and today the first results referring to the Italian market confirm our intuitions. They give us an initial indication, while waiting to know the dynamics of the payment systems of companies in the rest of the countries we are analyzing: UK, France, Germany and Spain".

The research was conducted through interviews with entrepreneurs and managers of 200 Italian companies of different sizes and geographical locations. The selected companies operate in different sectors: 40% in the manufacturing industry, 28% in the service sector and 21% in the trade sector, the remaining 10% belong to other sectors. The companies are also characterized by physical and/or digital sales channels: 36% use digital and physical channels, 29% only digital, the remaining 35% only physical channels.

The research photographs the current payment instruments in use between businesses in Italy and the propensity to adopt Buy Now Pay Later solutions in relation to the rate of digitalisation of financial instruments and in response to the emerging needs of corporates and SMEs in the management of payments and of the relationship with customers. Almost all companies (98% of the panel interviewed) manage their current accounts online, over half (57%) make use of services for the secure management of payments and collections, and just under (54%) use services to manage e-commerce payments.

Of these companies involved in the Ipsos research, 65% are mainly oriented towards payments over 30-60-90 days, compared to 20% who prefer payments in a single solution. Longer payment terms or medium-long term financing are used in a minority manner. Italian companies are aware of Buy Now Pay Later: over half (51%) declare that they know it well, only 14% have never heard of it; furthermore, the opportunities for BNPL in the B2B sector are known to over half of the interviewees.

Those who have already adopted it have recorded positive feedback from their customers in the majority of cases (91%). In particular, BNPL is appreciated by B2B merchants who see: in 42% of cases, regular collections and better cash flows; in 41% of cases, the possibility of personalizing the installment plans to be offered to customers; in 36% of cases, an increase in sales. Among the advantages also the reduction of administrative costs (for 36% of those interviewed) and of the risks of unpaid debts (33%).

Fintech firms could do more to intentionally target women customers in emerging markets. According to a new IFC report released today, by using business strategies informed by analyzing sex-disaggregated data, fintech firms could capitalize on the women's market while contributing to greater financial inclusion for women.

Fintech and digital financial services have been considered a game-changer for women's financial inclusion and economic empowerment. Until now, there has been limited research that quantifies the degree to which fintech firms are actively addressing women's financial inclusion and the specific strategies that are showing success.

To fill this gap, IFC conducted a survey of 114 fintech firms in emerging markets around the globe. The report, "Her Fintech Edge: Market Insights for Inclusive Growth", provides insights from fintech firms about their own perceptions and practices to deliver services to women's customer segments. "What is clear from this study is that strong behavioral gender differences, as well as barriers, call for fintech firms to offer differentiated solutions for women", said Emmanuel Nyirinkindi, Vice President of Cross-Cutting Solutions, IFC. "In doing so, fintech firms can unlock the full potential of the women's market – a valuable customer segment that exhibits greater loyalty, lower default rates, and strong revenue generation". 

The survey findings show that women still make up a minority of fintech portfolios, with 63% of the lending-focused fintech firms reporting that women-owned small and medium sized enterprises (SMEs) make up less than a quarter of their portfolio. Nevertheless, the report highlights that there is a strong business case for fintech firms to serve women customers. The majority of fintech firms consider women to be more loyal, less risky, and more or equally valuable customers than men. The survey found that 69% of lending focused fintech firms believe women's loyalty is greater than or equal to that of men.

The presence of leaders who have internalized the social or commercial value of serving women is the strongest internal driver for firms intentionally targeting women. The survey found that 58% of firms attribute their strategic focus on women to leaders' belief in the importance of women's financial inclusion. To target women intentionally, the report explains that fintech firms need knowledge, research, financial support, and technical assistance to fully capture the women's market.

According to the latest "FinTech Survey in the Italian financial system - 2023" conducted by the Bank of Italy, the finance technology sector in Italy could attract over 901 million in investments for the two-year period 2023-2024, in order to purchase innovative technologies for grow. While, in the two-year period 2021-2022 it amounted to 600 million euros. Furthermore, further investments of 380 million euros are planned starting from 2025, until the projects are completed. The total flow of investments associated with the projects surveyed, reports Bankitalia, is 1.88 billion euros. In the two-year period 2023-2024, spending increased 3.8 times compared to 2017-2018 even if "the process of digital transformation of the financial system, although expanding, is quantitatively limited and polarised".

This increase in investment is reflected in the advancement and adoption of key technologies that are shaping the fintech landscape. Among these, web-mobile platforms stood out, attracting 20.5% of investments. Closely followed by artificial intelligence (AI), which captured 16.5% of investments, and Application Programming Interfaces (APIs), which obtained 14.9%.

Focusing on the main business areas, financial intermediation emerges as the most financed sector, absorbing 43.7% of total investments. Payments are not far behind, with 39.4% of investments, highlighting the growing importance of these two areas in the fintech context.

In the world of payments, Instant Payments and integration into digital wallets represent the main trends, reflecting a change towards faster and more integrated transactions. In financial intermediation, however, the focus is on the digitalisation and automation of credit processes, marking a significant step towards operational efficiency and the reduction of processing times.

Like any innovation, however, the adoption of these technologies is bringing with it opportunities and challenges. A reduction in fraud is among the most obvious benefits, thanks to the use of advanced technological solutions. However, this shift towards the information technology side outsourcing also entails an increase in risks related to security and data management, underlining the need for a balance between innovation and cybersecurity in the fintech sector.

Finally, looking to the future, and above all to the new generation of entrepreneurs and professionals in the industry, the report also emerges that, over the last year, there has been an increase in the number of fintech startups in Italy which have brought innovation and change to the sector and particularly in the field of digital payments, where many of them develop electronic wallets, payment applications and money transfer services. Even in the lending and loan segment, these companies offer proposals ranging from online loans to alternative financing solutions. Blockchain technology and cryptocurrencies represent another area of ​​strong growth. Finally, some startups stand out in the digital asset management sector, offering automated financial advisory services, also known as robo-advisory.

Another important fact for the growth of the startup ecosystem in Italian fintech is also the increase in collaborations with traditional banks and other financial institutions which is becoming more and more frequent. However, when entering a more traditional collaborative context, startups quickly find themselves facing significant challenges. Among these, regulation and compliance, competition, and building a relationship of trust with customers represent the main obstacles on which these young excellences will have to keep working in order to continue innovating the market.

The Preparation Phase of the Digital Euro initiative by the ECB is in full swing. Developments will continue through 2024-2025, with the goal to have the first digital euro emission by 2026.

Undoubtedly beneficial for the citizens of the European Union, European financial institutions are currently analysing the impacts and associated benefits of launching this initiative.

On one hand, detractors of the Digital Euro argue that commercial banks will need to allocate a substantial portion of their Capex and Opex expenses towards the technological infrastructure enabling the Digital Euro. This would mean that such funds could not be invested in innovative themes at their discretion, potentially slowing down their ability to drive innovation in areas they prioritize.
Furthermore, the advent of the Digital Euro could have serious impacts on liquidity balance sheet compliance, a concern already raised by Bank of Italy in its recent study.

On the other hand, the advent of the Digital Euro could certainly bring an increase in revenues and customer loyalty for banks by being able to implement, based on the solid foundation of the Digital Euro account, additional services for customers covering access, transactions and liquidity management use cases. These include financial education of customers through learning resources and support, payments related services such as split payments and pay-per-use model enabled by pre-authorization service, exchange with other CBDCs, insurance coverage of Digital Euro account and transactions, etc.

Additionally, the Digital Euro could be the catalyst for the establishment of a digital wallet that banks can offer to their customers, combining 360-degree services to contain digital identity, traditional commercial bank money, e-money and digital assets, credit worthiness attributes, etc. thereby increasing the services offered to their customers.

In summary, the debate is still open, but what is certain is that the ECB seems determined to delve into it, and banks will need to act now to begin considering the impacts on their functions and already budgeting to meet the requirements of this initiative. By observing the evolving landscape of the Digital Euro, it is clear that leading financial institutions in the Italian market are already forming working groups to address this change. This initiative serves as a strong invitation for all banking players to take on a more proactive role, engaging in the early stages to shape the direction and application of the Digital Euro.

written by Enrico Ugoletti, partner, EY and Giovanni Burattini, senior manager, EY

Bringing the spirit and opportunities of fintech throughout Italy. This is the objective that led Fintech District and Fiera Milano, through the activity of its knowledge unit, Business International, to create the roadshow dedicated to FinTech. The initiative will have its first stop in Rome, on 18 April, at the Delegation of Rome of the Lombardy Region, and then move towards Reggio Emilia, where, on June 25^th will take place the second appointment of a journey designed to drive the audience until the fifth edition of the Milan Fintech Summit, scheduled at the Allianz MiCo in Milan, on 8 and 9 October.

An ever-increasing interest in the sector at a global level and a domestic market full of excellence, also recognized internationally, but also with still unexplored potential. These will be the premises from which will start the two meetings those will precede the traditional annual event on the evolution of the banking and financial services sector which in the autumn – with the support of the city of Milan, through Milano&Partners (the official agency of Milan) – will bring together in Milan the CEOs of international and Italian fintech excellences, financial players, investors, large companies and SMEs interested in fintech solutions to simplify business processes, institutions, associations, foreign HUBs. The objective, as always, will be to strengthen Milan's role as the European capital of innovation and enhance the Italian ecosystem at an international level, attracting investments and talents and creating business networking opportunities, but unlike the past and remaining faithful to the promise made last year, the novelty that this approach aims to propose to the market will be precisely that of highlighting the innovative capabilities and potential of the entire peninsular territory.

Clelia Tosi, Head of Fintech District: “Fintech is in a crucial evolutionary moment and today more than ever it is necessary to stop and reflect on the drivers that will allow the sector to continue to express its potential, even in a less favorable macroeconomic context compared to the past. The mission of Fintech District is to promote initiatives that support the development of the ecosystem and fintech culture and the Milan Fintech Summit is among the most significant initiatives to achieve this goal. Milan must continue to lead innovation, but it is time to also turn the spotlight on the excellence of the rest of the country. The meeting and discussion between all stakeholders is fundamental for the healthy and constant growth of the sector, we are certain that the new edition of the event, as happened in the past, will push Italian fintech towards increasingly ambitious goals".

Umberto Pellegrino, Head of Business International, the knowledge unit of Fiera Milano, commented: “The launch of a roadshow on the world of fintech once again underlines Fiera Milano's commitment to promoting a new culture of innovation throughout the national territory, proposing Milan and Italy as an example of a new way of doing business. An activity which, thanks to the experience acquired in these editions of the Milan Fintech Summit and the thirty-year heritage of our knowledge unit, Business International, today knows how to look at young people, collaboration, innovation and also at an increasingly digital and sustainable business. The opportunity that we want to seize now, in fact, is not only that of following a trend of growth and internationalization, but is precisely that of being protagonists of change, driving the country's ecosystem towards an unavoidable and above all necessary transformation. An evolutionary process that sees new banking and financial services as an innovative and disruptive development model that we would like to become a proactive standard for any other business sector."

THE FIRST STOP: ROME, 18 APRIL

Rome is therefore preparing to welcome the first stage of the Milan Fintech Summit roadshow – organized in collaboration with the Lombardy Region – which will represent an initial moment of discussion on key issues such as: development trends and prospects; fintech as a career opportunity; female entrepreneurship in the sector; regulation and solutions to combat financial crimes.

MFS University: You can start doing fintech: the morning will be dedicated to university students who will be able to delve deeper into the career opportunities that fintech offers and the fintech solutions that simplify everyday life.

Mohamed Fadiga (EasyPol), Enrico Giuseppe Ricceri (Expert Revolution) and Luigi Ucci (UpsideTown) will intervene in the first part of the discussion, explaining how fintech can simplify daily life. Orlando Merone (Conio), Roberto Macina (Profit Farm) and Matteo Longoni (Finanz) will talk about what it means to start a fintech startup and consider fintech your career path.

In the afternoon, however, the doors will open for companies. Chiara Padua and Umberto Pellegrino, the Co-Heads of the Milan Fintech Summit, will open the event. This moment will then be followed by a speech by Massimo Carnelos, Embassy Counselor and Head of the Technological Innovation and Startup Office at the Ministry of Foreign Affairs and International Cooperation, who will give a global vision of the state of the art of the sector, and the Director General of 'ABI, Giovanni Sabatini, who will focus on the ways of collaboration between banks and fintechs and the boundaries of innovation thanks to sandboxes.

And regulation comes knocking, industry experts and institutional representatives will discuss the regulation of fintech, highlighting the growth opportunities it can offer the sector. Pierfrancesco Gaggi (ABI), Massimo Doria (“Milano Hub” Bank of Italy), Davide Fioranelli (Lumen Ventures/Freetrade), Gessyca Golia (Lombardy Region) and Laura Larducci (MEF) will bring their perspectives on the topic.

What women don't say: the number of fintech companies founded and led by women is growing over time and the topic of female entrepreneurship is also key in this area. Much can and still needs to be done in terms of policies and incentives. Moderated by Annamaria Arcese, this round table will see the participation of Camilla Cionini Visani of ItaliaFintech and Claudia Segre of Assofintech. Stefano Azzalin of dpixel and Mariano Spalletti of Qonto will also speak.

There are those who say no to Financial Crime: the fight against financial crimes is a critical issue in the digital age. Roberto Caramia of ACN-National Cybersecurity Agency, Cristiano Leggeri of the State Police, Postal and Communications Service, Daniele Azzaro of CleverChain and Pierguido Iezzi of Swascan - Tinexta Cyber ​​will participate in the discussion on how to face this challenge.

KYC coming, AML going: the day will end with a series of pitches presented by fintech companies that offer innovative solutions for Know-Your-Customer and Anti-Money Laundering, also using artificial intelligence solutions. Daniele Giuliani (GenioDiligence), Edwin Colella (Wallife), Salvatore Mafodda (Ineo) and Salvatore Carso (Keyless) will present their proposals.

SMELLS LIKE FINTECH SPIRIT
Like every year, the Milan Fintech Summit will be characterized by a common thread that will make the event even more special. If last year books were the underlying theme of the works, this year, however, music will reign supreme. The 2024 edition of the Milan Fintech Summit, in fact, will be inspired by the sound of the best national and international artists. Starting from the pay-off “Smells like fintech spirit”, clearly inspired by Nirvana, each session will refer to the title of a well-known song. Speakers, partners and participants will be asked to share their favorite song to create the official playlist of the Milan Fintech Summit.

The results of the latest edition – 95 partners, over 110 Italian and international speakers, the participation of international Unicorns and over 1,300 people (of which 63% C Level) from over 30 countries – confirm the central role of the event for carry forward a constructive debate on the evolutionary trends.