Un digital euro is worth more than a euro in cash. Because the digital euro also contains a data assets which can be transformed into value: information about who spent it, their habits and tastes, but also their creditworthiness and their transaction history, whether it is a natural person or a company. Transforming that potential value into services and products is the intuition behind fintech. For clarity, we are not talking about cryptocurrencies, but about digital coins, used in all electronic payments, including banking transactions.
Finance had already progressively become digitalised with the introduction of online banking, which however is simply limited to reproducing the same services provided in branches online.
Il digital finance concept evolved goes beyond this simple transposition of services, implying the use of technologies and data to provide increasingly focused, rapid and tailor-made services based on customer needs.
What is giving decisive impetus to fintech is the Psd2, the European regulation for payment services, which introduced the obligation for banks and financial institutions to share all available information related to transactions with third parties. Thus was born the concept of open banking, of financial services that can also be provided by non-banking entities.
The new context guaranteed by Psd2 has encouraged the integration of these services within the offer of traditional banks and the identification of value-added services that create new approaches and new business models, starting from the world of payments, already in strong evolution.
Post-Covid euphoria and investment adjustment
From this point of view, for both companies and consumers the anti-Covid lockdown period was a real watershed that led to an overall change in behavior, now taking for granted the possibility of using services that are not only completely digitalised, but above all simple, fast, directly from your smartphone, frictionless. The new frontier is that of “invisible” payments, which will allow for example to leave the supermarket without going through the checkout.
At the end of 2023 theFintech and Insurtech Observatory of the Polytechnic of Milan has mapped it well 622 startup in the sector, which raised funds amounting to 201 million euros, with a decrease of close to 80% compared to the previous year.
The contraction in Italy is part of a global trend of downsizing in fintech investments, which had suffered from an excess of enthusiasm with valuations outside of any financial logic. The data speaks of a total of fintech investments, which have fallen by almost 70% compared to the post-Covid peak of 2021, to 156 billion dollars in 2023. On the other hand, innovation has always entailed the risk of financial bubbles based on excessive expectations.
To tell the truth, the Italian fintech sector records substantial stability in the number of startups, a sign, according to the Observatory, "of greater market maturity: more and more startups are seeing opportunities for growth and synergies within other groups, both financial and industrial". In short, fintech is increasingly taking the form of a philosophy of supply and use of financial services, not necessarily in conflict with traditional players, but integrated within the sector.
Innovation and sources of financing for families and businesses
THE innovation it also involved the more traditional features of finance: digital has progressively improved its effectiveness as a facilitation tool in matching the supply and demand of capital, both in terms of equity and simple lending, enabling the diversification of financing sources for businesses and consumers and channeling the funds raised from small investors towards the real economy.
From a retail perspective, for example, the “buy now pay later” is configured as a new, rapid and flexible form of consumer credit with payment installments obtained instantly at the time of purchase. In the business sector, equity crowdfunding is an alternative system for financing business ideas, even small and very small ones, which uses the internet to raise funds and which in the twelve months to July 2023 stabilized at 344 million euros. Always at the service of businesses, digitalisation has made the entire working capital financing sector increasingly efficient, with companies' cash assets estimated at between 460 and 495 billion euros.
Innovation for savers
At the same time the fintech digitalisation also involved the investment sector and wealth management. Today, in fact, there are retail applications that enable investments in shares, including fractional ones, funds, ETFs and cryptocurrencies, with sums starting from five euros (or even less) with continuous operation, 24 hours a day, seven days a week, from your own smartphones. There are also applications that support more structured investments and accumulation plans that use robot advisors (always mediated by humans) that use data relating to market trends and needs combined with the investor's risk propensity to identify strategies profiled on the single investor.
The technological frontier ofartificial intelligence It represents a crucial support for the evolution of fintech as a whole. Today, artificial intelligence algorithms offer the opportunity to enhance the enormous wealth of data left unproductive in the belly of banks, transforming it into personalized offers that range from purely commercial proposals with external partners to financial products tailor-made for the user, company or person.
After the boom of the post-Covid phase, Fintech investments they are starting to slow down.
According to the survey conducted by the Bank of Italy, the main obstacle to Fintech investments is represented by poor interoperability between fintech projects and pre-existing IT systems. In second place according to the survey is the low demand waiting for the products and services generated by the investments.
Among the factors that represent an obstacle to Fintech investments there is the difficulty in find adequate human capital: this is one of the issues that will continue to represent a constraint on the introduction of new technologies in various sectors of the Italian economy.
