Heterogeneous, small in size, with little capital, but also with high growth potential to support the real economy. This is the picture of the fintech sector in Italy that emerges from the report conducted by EY and Fintech District presented on September 17th, at the first Italian Insurtech Summit.
Innovation in the financial sector is increasingly winning the trust of consumers: although Italians still see traditional operators as the first point of contact – 55% turn first to the bank or traditional insurance company -, the adoption rate of fintech solutions is growing strongly: +51% in 2019 according to the EY FinTech adoption index.
Find out how the fintech sector in Italy could help at the economic revival of Italy and read the latest economic news with the Born2Invest mobile app.
The number of fintech companies in Italy is constantly increasing
The number of fintech solutions is also growing steadily: in 2011, there were 11 fintech companies, rising to 199 in 2015. In 2020 there were 345 companies, mostly concentrated in Lombardy (169), characterized by a strong presence in crowdfunding (71), followed by startups dealing with data analytics, machine learning, and artificial intelligence (35), by those offering smart payments (34) and lending services (30).
The average value of the investments raised by each startup is around $825,000 (€700,000), with 95% reaching a post-money valuation of over $1.18 million (€1 million). In fact, investments are clearly lagging behind other countries: in 2019, Italy attracted only 2% of total capital invested in the fintech sector in Europe, compared to 50% in the UK and 19% in Germany.
Recently, underlined the analysis, the gap has started to narrow: financing to fintech startups has grown to a CAGR of over 60% from 2016 to 2019, which recorded a record $307.9 million (€261 million).
The innovation in the fintech sector will benefit the country’s economy
This year “the Italian fintech ecosystem has shown important signs of resilience, also from the point of view of access to new sources of financing: in particular, the main fundraising activities in the first 8 months of 2020 reached $106 million (€90 million).” Although the trend is positive, the numbers continue to show a high concentration of investments in favor of a few startups.
“To create a more mature Italian ecosystem, it is necessary to launch specific investment funds and encourage collaboration between incumbents and startups. This change of approach could boost investor interest and generate more M&A operations,” commented Andrea Ferretti, Markets Financial Services & FinTech Italian Leader at EY.
Alessandro Longoni, Head of Fintech District said: “The growth line of the Italian fintech market is now traced, but we believe that much can still be done, working mainly on three lines: tax breaks dedicated to corporate venture capital to make investment in innovation an opportunity, a greater ability of our entrepreneurs to think on a large scale beyond national borders, and a concrete commitment to talent and training.”
On the other hand, the entire national economic system has to gain from the development of fintech innovation and coexistence with traditional players. Starting from SMEs that, according to the EY-Fintech District analysis, require more and more flexible and efficient services from banks, leveraging the offer of fintech companies, while cybersecurity and cyber insurance will become more and more priority due to the challenges and critical issues related to digital transformation.
Among other trends, compliance will continue to play a primary role in financial services, driving regtech and wealthtech, enabled by artificial intelligence, will revolutionize the Wealth & Asset Management industry.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in Il Sole 24 ORE, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
Banco Falabella wins Fintech Americas International Award for Innovation
The efforts of Banco Falabella to implement new technology and innovate the financial sector paid off. The bank was recognized...
How To E-A-T Your Way to the Content Google Likes
Businesses looking to attract more web traffic will have to consider Google’s EAT guidelines. Learn about what Google EAT is...
Stablecoins: The New Kid On The Crypto Block
A new class of cryptocurrency that minimizes price volatility, stablecoins are attracting the attention of regulators globally. The problem? Lack...
Bill Authorizing Medical Cannabis Cultivation Advances in Brazilian Congress
The bill legalizing the cultivation of cannabis for medical and industrial purposes was approved by the Brazilian Chamber of Deputies....
Housell Maintains its Commitment to Digitization to take 5% of the Real Estate Market
The real estate company Housell argued that more and more people are daring to buy homes online. According to a...
Featured6 days ago
Barron’s Gold Mining Index 1920 to 2021
Business6 days ago
A 10% decline would not be a surprise although the tech-heavy NASDAQ could see a bigger drop
Featured6 days ago
Expensya Received 20 Million in its Latest Financing Round
Biotech6 days ago
Four Million Euros Allocated for Medical Gases by the Government of Cantabria