Fintech is a fast-growing sector in Italy. While Milan is home to some 120 startups, the capital is also very attractive to entrepreneurs due to the presence of wealthy customers.
Fintech ecosystem reaches maturity in Italy
According to Italia Fintech, the fintech ecosystem grew rapidly in 2019 and is now reaching a stage of maturity, both in terms of Italian and European startups. In June 2019, an Italian "sandbox " was created to strengthen dialogue between these new players, public authorities and traditional banks. This system consists of obtaining authorization from the local regulator to experiment with new services in real time within a specific, streamlined regulatory framework. The creation of a sandbox should foster cooperation and innovation to accelerate the development of the Italian Fintech ecosystem.
Italy is not the only country to have set up this experimental program. In fact, the UK capital was an early adopter of fintech regulation and support. In addition to a sandbox, the FCA, the UK's financial sector regulator, launched the "Inovate" project in 2014, enabling these players to obtain advice on introducing their solutions to the market. Switzerland, meanwhile, has developed a dedicated Fintech license with the aim of fostering the development of new business models. Singapore is also heavily involved in the growth of startups. The Singaporean government has launched a number of initiatives to boost its local ecosystem, including the creation of a sandbox to encourage experimentation.
Italia Fintech has entered into a partnership with the Italian Banking Association (Associazione Bancaria Italiana) to work together on regulatory and business challenges for startups offering financial services via innovative technologies.
Milan and Rome, Italy's two main fintech hubs
According to data collected by Italia Fintech, Milan and Rome represent the two main Fintech hubs in Italy. Of the 300 startups present in Italy, 186 offer banking and financial services exclusively, while 119 deal with tech-related subjects (RegTech, InsurTech, cybersecurity, etc.). The payments sector is particularly popular, due to its high potential. Indeed, online payments are growing twice as fast in Italy as the European average. Credit card payments now account for the majority of online payments. This development is also linked to the emergence of new payment methods, in particular mobile payments, which appeal mainly to the new generation looking for fast, simple banking services.
The Italian fintech ecosystem is in full swing. National initiatives should enable this market to develop further.