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How fintech is helping Italians ditch cash

Managing cash in stores remains a major challenge for retailers. Cash is expensive to process and secure. In addition, trapped cash hinders working capital management: When cash sits in registers and in cash rooms, it is unavailable for investment, debt repayment or business expansion. Market leaders are meeting this challenge by developing new ways to manage store cash and payment methods.



This picture show the fintech usage for ditching case.

One in two Italians who have access to the internet has used at least a couple of fintech solutions this year.

Despite being lower than the world average of fintech usage (64%), the data can be surprising in some ways. This is the result of the Global Fintech Adoption Index developed by Ey, which includes Italy for the first time.

The index was done on the basis of 27,000 online interviews in 27 markets. Starting in 2015, this research has seen the global average adoption of fintech services rise from 16% to 43% in 2017, to reach 64% in 2019.

The data is becoming more interesting if we consider the definition that Ey gives to fintech solutions, characterized by technology. The innovation of its business model changes the interaction between consumers and companies. This is also thanks to the fact that the service has been “rethought” or “invented”.

In essence, these are borderline financial services such as payments or loans between individuals or digital comparators of insurance policies.

Most of the services they offer are not offered by the traditional banking world. Precisely for this reason, characteristics such as access to the network, above all through mobile devices, and the development of the banking network contribute to determining a ranking that is anything but obvious for the index developed by Ey.

Leaders in fintech services

China and India are the leaders in terms of adopting the fintech services with 87%, followed in the Top 10 by Russia and South Africa (82%), Colombia (76%), Peru (75%), Holland (73%), Mexico (72%), Ireland and the UK (71%).

These are countries with very different social, economic and technological characteristics which, however, can determine, in different ways, the push in favor of a higher level of confidence with fintech solutions.

The example of India is valid for all, where, especially in rural areas, the mobile connection may not represent a problem but the penetration and accessibility of bank branches are rather low.

Italy ranks 22nd among the 27 markets considered. Therefore, there are many margins for growth. “Our country is not, however, a tail-end in the adoption of fintech services,” stresses Filippo Mastropietro, Ey’s Customer and digital strategy leader for financial services.

This is despite being behind countries like the U.K. and Germany, thanks to a strong innovative drive. The proliferation of services offered by new players brings the level of fintech adoption to 51% in 2019.

This picture show a person lending cash, representing the fintech usage for ditching cash.
Traditional banking solutions, such as bank branch deposits and cash vault services, offer limited efficiencies. (Source)

Easier path than the rest of Europe

This result is much higher than in other European countries such as France and Belgium, where widespread fintech is not developed. This is also because of the barriers to entry due to a strong concentration of the banking sector. Moreover, four of the 10 largest European banks are French.

In fact, aside from Italy, there are countries whose positioning in terms of the Ey index may be unexpected. Japan closes the ranking with 34%, France is the penultimate with 35%, and just above there are Belgium and Luxembourg (42%), the United States (46%), and Canada (50%). Finally, Spain (56%) is just ahead, while Germany is in line with the global average.

However, the level of fintech adoption is not homogeneous in our country when looking at the different categories of services. In money transfer and payments, the index is 42% compared to a global average of 75%, decreases to 29% in loans and ranks just over 20% in financial planning and savings and investments.

“In the face of growth in innovative services in credit and digital payments,” says Mastropietro, “there are still no fintech companies in Italy that represent cases of extreme success at the international level.”

However, there is a level of adoption of insurtech services of 61%, far above the global average of 48%, thanks to the consolidation of digital brokers, online comparators and business applications in the non-life sector. In short, a bit backward, yes, but not too far.

A better way

Retailers will continue accepting cash payments for years to come. Managing that cash efficiently can have an impact both on store efficiency and on working capital, directly improving the bottom line.

Traditional banking solutions, such as bank branch deposits and cash vault services, offer limited efficiencies.

However, new technology solutions, such as smart safes and recycler, can help retailers free up trapped cash. They will also help lower costs, reduce losses, achieve faster access to funds, and improve information management.


(Featured image by Pixabay via Pexels)

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First published in L’Economia, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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Sharon Harris is a feminist and a part-time nomad. She reports about businesses primarily involved in tech, CBD, and crypto. She started her career as a product manager at a Silicon Valley startup but now enjoys a new life as a personal finance geek and writer. Her primary aim is to provide readers with a new perspective on the overlapping world of finance and technology.