Podcast transcript: How EY is going beyond borders with FinTechs in Italy
47 min approx | 20 November 2020
You are listening to EY FinTech Beyond Borders. A podcast dedicated to exploring the European FinTech, WealthTech, InsurTech, and RegTech industries.
Christopher Schmitz
Hello everybody, and welcome to today’s episode of EY FinTech Beyond Borders, our podcast covering interesting developments in the European FinTech ecosystem. In this episode, focusing on Italy, I’m delighted to cover one of the European countries that has witnessed a rapid development of the FinTech ecosystem in the past two to three years.
To shed light on this steep growth, we’ve invited a number of speakers to this podcast who will provide their deep insights on the Italian ecosystem. Our second podcast host today is Susan Barton, who, despite having an English name, lives in Milan and has been one of the driving forces of EY’s engagement with the Italian FinTech ecosystem in the past years. Welcome, Susan. It’s great to have you co-hosting today’s podcast.
Susan M. Barton
Hello. Thank you so much. I’m Susan and I’m a Director at EY. From the first time I have worked with FinTechs, I felt like I was looking into the future. Today, I’m here with Chris and our guests who are building that future in Italy.
Schmitz
And without further ado, let me welcome our guests. First of all, Alberto Dalmasso. He’s the CEO and cofounder of Satispay. Then we have Simone Ranucci Brandimarte. He’s Yolo president and president of the Italian Insurtech Association. We also have Alessandro Longoni. He’s the head of FinTech District in the land based FinTech ecosystem. And finally, Gianluca Magonio from EY. He’s a Senior Manager from our strategy and transactions practice. Alberto, would you like to start with a short introduction?
Alberto Dalmasso
Yes, absolutely. I’m happy to be here with you today. I’m, as you said, the cofounder of Satispay, which is the leading mobile payment platform in Italy.
Schmitz
Thanks very much. The next is Simone.
Simone Ranucci Brandimarte
Hi, good afternoon to everybody. I’m happy to be with you. I’m Simone Ranucci Brandimarte, I’m the founder and president of Yolo and president for the Italian Insurtech Association, as the main aim to support the digitalization of the insurance industry.
Schmitz
Thanks, Simone. Alessandro.
Alessandro Longoni
Hello, everybody. My name is Alessandro Longoni. I’m responsible for the FinTech District that is the main FinTech hub in Italy. We build collaborations between FinTech companies and corporates. Thanks for having me today.
Schmitz
We are delighted to have you. Gianluca.
Gianluca Magonio
Hi, everyone, this is Gianluca Magonio from EY. I’m a Director in the M&A team of EY, covering financial services and the FinTech space.
Schmitz
Thanks very much, Gianluca. Now, let’s first provide you with a couple of insights into the ecosystem that were derived from the EY report labelled FinTech Waves, Italian FinTech Ecosystem, which was published in September this year. Over to you, Susan.
Barton
Thanks, Chris. Really, what we’re looking at in Italy is that FinTech is gaining momentum, and we can see this if we just look at two simple facts about FinTech growth in Italy. First, if we look at the number of FinTech start-ups in Italy. Back in 2011, so just nine years ago, there were only 16 FinTech start-ups. By 2015, there were 199. And by the time we got to 2019 last year, there were 345. So, we’re looking at exponential growth.
We see that not only with the number of FinTechs but also, with the number of people interested in this or the academic relevance. So, if you looked up the term FinTech in 2011, you would have got just over 2,000 results. That would have doubled by 2015 to get 4,650 results, but by 2020, you can get 18,300 results coming up.
And this has really been the reason why we wanted to look at this FinTech ecosystem in Italy and we look at it from three different points of view in this study. We looked at it from corporate finance, people and skills, and risk and compliance. But really, we want to hear more from our guests about how this ecosystem works. So, what makes up the Italian FinTech ecosystem in terms of size, stage of development, and similarity of one FinTech to another?
Longoni
Susan, this is Alessandro. I would be very happy to take this first question because, as you know, we worked really hard together on this research. There is plenty of data in this research and on the ecosystem and I’m just popping up some numbers for everyone that I believe are actually relevant. As you mentioned, the dimension now is with approximately 345 start-ups in 2019. There is a plus 15% from 2018.
And the five largest segments represent 58% of the Italian start-ups, the five largest segments as of today are crowdfunding, smart payments and money transfers, Insurtech, DNA ML and AI, and lending. When it comes to the fund raised, most start-ups are in the intermediate stages of growth and have raised less than €1 million in Italy. With Satispay and Alberto here today being a huge success case, he can probably comment during the podcast.
It’s also very interesting to note that the geographical distribution is that more than half of all Italian FinTech companies are in Lombardy and 214 companies out of 345 are located in the Milan area. For example, teams. Teams have a median of 8.5 employees per start-up, while founders, on average, are 1.8 per each start-up with an average age that is of 46 years per founder. There is a lot that we could also talk about around talent and gender gap, but maybe we can go back to that during the podcast.
Barton
Thank you, Ale. I know, Gianluca, you were very interested in looking at funds raised when we look at this Italian FinTech ecosystem.
Magonio
Thanks, Susan, Alessandro. Absolutely. I think fundraising is a very interesting topic for FinTech, which is in the phase where a fund is important to develop their strategic ideas. We have seen a lot of growth in recent years. If you look since 2016, there has been an intensive growth in the funding raised by FinTech. Of course, given the characteristics of our Italian FinTech ecosystem, the majority, on average, I would say, our firms are able to access seed investments through family and friends, or business angels, or other operators that operate in this kind of area.
Of course, there are increasing challenges when we arrive at further rounds, so a lower number of FinTechs having access to round A onwards, in terms of funding. But I think we are on the right path. There are also good signs from an international point of view, because I think international investors are looking with increasing interest at the Italian FinTech ecosystem for several reasons.
First of all, given that we have always been a step, let’s say, behind compared to other countries, but we are getting there in terms of digitalization. I think that there are future opportunities that are interesting from an investor point of view. Then, of course, we have interesting ideas. Our FinTechs are very valid from the ideas that they are able to propose to the market.
Then, of course, the current situation, the current crisis, will potentially accelerate our digitalization process in terms of country, in terms of attitude. So, we are on the right path, I would say, the expectations are positive for our ecosystem.
Schmitz
FinTech solutions seem to be particularly widespread in Anglo Saxon and Nordic countries, France and Germany, probably, while in the Mediterranean countries, they seem less developed, at least that was the outcome of the FinTech adoption that we’ve been running a couple of times. From your point of view, Alberto, is there any cultural, economic, or political reason that explains these differences in development spread and adoption?
Dalmasso
Absolutely. First of all, as we talk about FinTech and financial services. If you look into the banking industry, there are many other countries that have pushed innovation. You have, in Italy, hundreds of different banks, most of the time, very small banks, that have the firepower to create innovation themselves. So, it’s up until the point where both regulation and technology enable new-born companies and start-ups to compete that FinTech didn’t have the right environment to deploy and grow.
The other reason, I believe, is the slightly older population compared to what you may find in other countries. So, it takes more time to adapt technology and digital solutions. We’ve seen it in other sectors, even in e-commerce, but we are now picking up with a good pace. And then, I believe, we can even talk about this in more detail later, but if you look into the size of the company, companies in Italy, you don’t have a lot of corporate. You have mostly small and medium enterprise.
So, you need a certain specific category of products for them to use as consumers, but you never have them creating the innovation into the FinTech space as we have seen happening in other markets where, many times, FinTech services came from non-financial sectors coming into lending, payments from the e-commerce sector, providing lending to the small merchants working on an e-commerce platform from the delivery becoming a mobile wallet.
Being an SME market, it took more time to have only the start-up, I would say, that created opportunity for the FinTech to develop in Italy. And as we will say later, as we don’t have a very strong venture capital sector, start-ups arrived only in the past few years.
Barton
I’m curious, Gianluca, if you have some comments for us about some of these difficulties that we face, particularly in Italy, but also how Italy has been impacted recently by the recent COVID outbreak.
Magonio
Absolutely. I completely agree with Alessandro and I think that there are some cultural aspects in Italy that need to be considered. Our culture, generally, prefers a personal relationship, even in business, so this could be a reason why we are a step behind, compared to other countries, in terms of digitalization. I think the challenge for the future would be to find the right mix because a personal relationship is something that we need to keep.
It’s of value in our culture and it must be protected. Of course, digitization is the future, it’s a process that cannot be stopped. So, we need to find the right mix between personal relationships and going always more digital. Second, as Alessandro mentioned, our economic tech style is composed by a lot of small players: SME and local independent businesses, that, compared to other countries, potentially, this small size, can be a bit more challenging to go online for certain services or try to have an approach, which is highly digitalized.
COVID, unfortunately, the crisis has hit a lot of firms, including FinTech. However, in the long term, so even if in the short term, there are bad effects, in the long term, there could be a process of accelerating the digitalization that’s started. I think the world, after the pandemic, will be different and Italy will be different from the way we approach digital services. And of course, FinTech can, in the long term, see the growth expectation improved in the long term if there is an increase in demand.
Schmitz
You’ve covered it already just a couple of seconds ago, SMEs are crucial to the economy of every country, but most often, the existing solution of incumbent banks and insurance companies don’t really serve this customer segment well. We have seen, in other economies, other ecosystems, like the UK and Germany, intensive collaboration, but also intensive competition around that SME segment. Would you see such a development for Italy as well and can FinTech solutions help better serve SMEs?
Dalmasso
Absolutely. We built our initial success around SMEs, going back to Satispay, we are the leading mobile payment solution in Italy and the reason why we are leading the sector is because we have created an independent mobile payment network from debit and credit cards to create a cheaper solution, easy to adopt, that has been appreciated by the small merchant.
And here, you also see another reason for the fact that we are a bit behind in digital payments because in other countries, you tend to pay with your card because most of the time, you pay in a shop that is owned by a large retailer, a large corporation. Where in Italy, you tend to pay in a shop that is a family owned business. So, they don’t have the negotiation power of large retailers to have a good deal on the credit card acquiring fees, debit card acquiring fees.
And it’s from trying to think of a solution that will be appreciated by the small merchant, thinking outside of the box, and being a tech company that is tackling the payment, this has been the reason why we now have more than 130,000 merchants on the platform. And it’s because we’re still relying on the multilateral scheme of credit and debit cards.
I think it’s important to notice that most of the banks and the insurance companies don’t even own their own technology. They are not tech companies. They don’t own a team of developers. While FinTech can come into the space, see an opportunity in the market, as we have seen for the fact that 80% of payments in bricks and mortar shops are still cash, and it’s mainly driven by the fact that merchants don’t like credit cards.
So, we developed, as a tech company, that then decided to be authorized as an e-money institution, but first of all, Satispay is a tech company as most of the FinTechs. We have created an independent payment network, connecting back accounts to solve the problem that a consumer in Italy typically feels that he cannot use his digital payment solution everywhere, because they are not accepted for a small transaction.
As we grow into this sector of payments and we deal with hundreds of thousands of merchants, we constantly hear from our merchants about the fact that they are not happy with the financial solution they have from traditional incumbents in the way they pay salary, in the way they perform any kind of payment, in the way they ask for credit, factoring, the kind of insurance that is not really aligned to their needs.
So, at the beginning, everybody tried to create a consumer solution in the FinTech space and it’s absolutely the biggest market. We see more and more huge opportunities in giving to SMEs the right product, in terms of financial products to them. At the end, if you think about the typical size of the business of and SME, they are just like consumers themselves.
So, I think with the typical setup of a FinTech company that is a tech company that joins the financial services arena, we will see better and better products for SMEs coming from the FinTech industry, and we will see huge business opportunities from that segment.
Schmitz
Having understood that SMEs are crucial for the economy, a question for Alessandro, because you are operating the Milan based FinTech District where cooperation also happens between FinTechs and incumbents. Do you see that there is a trend that SME solutions are being developed right now and brought to the market?
Longoni
That’s a very good question. I totally see that happening, especially because the landscape in Italy is very strong when it comes to SMEs. We’ve got more than 160,000 SMEs in Italy and they are responsible for creating 68% of the Italian added value on the gross domestic product against the European average of 57%. So, solutions certainly need to address the needs of SMEs. One example was exactly the one that Alberto described briefly before.
Other examples are, for example, the credit scoring assessment that banks are not able to do in serving SMEs. So, there are some FinTechs that are creating credit scoring assessments for small and medium enterprises. And of course, a second part that is more related to liquidity because of difficult access to bank credit for SMEs, and I’m sure Gianluca could add to this.
Magonio
Absolutely. The SME topic is very important in Italy. As you mentioned, the economic textile of Italy is composed of a lot of SMEs, compared to other European countries. So, we have a lot of value there. Especially in the situation with the current crisis, liquidity is a priority for the SMEs, so a FinTech operator can provide liquidity to the system in a quicker manner, which is good.
And over time, I noticed that there is an increasing collaboration between FinTech in this space and traditional operators, like traditional banks. I think the challenge here is mainly for small and mid-sized banks that will need to potentially have an increasing collaboration with FinTechs in order to improve the processes, in order that the services improve the cost income.
So, I think collaboration between traditional operators and FinTech is key, especially in the SME space. I see a lot of value in the SME space in Italy. In fact, there are a lot of operators that try to find the right keys in order to open the value in this sector.
Barton
I think it’s clear how SMEs are going to continue to influence the success of FinTechs. I have a question for Simone, as the president of Yolo, a real success story in the FinTech Insurtech space. Can FinTechs and the incumbents really collaborate?
Brandimarte
The collaboration between incumbents and the FinTechs should be crucial for both, like it’s crucial for all the tech and innovation in the country. So, it should be successful for the incumbent, for the start-up, as well as for the fellow consumer. It accelerates innovation, it guarantees a faster reach to critical mass, reduces costs of implementation, and let’s say there is a good sharing of skill and competencies. So, it should be the standard, because it’s a great deal for everybody.
But it’s not really happening so often. Why? In Italy, for sure, it’s for three main reasons. One, start-ups are looking forward for the next three to seven years, while unfortunately, incumbents have a shorter view. So, the ROI needs are limited to one to maximum needs, so there is a gap of expectation. The second is that from a project management point of view, it’s not so easy to mix a young, fast, dynamic environment of tech start-ups with the environment of incumbents that, apart from a few cases, are still traditional.
And the third is availability of money and investment. Unfortunately, if you look at the percentage of technology investment in innovation by the Italian banks and insurance, this is below the European average. Just to give you an example, the European insurance companies in central Europe they invest 11% or 12% in innovation, while in Italy, this is just 3% or 4%, so there is a gap.
So, how can we improve on this? This is really a question of priority and a question of allocation of investment. So, due to the fact that digitalization should be a priority for the system and FinTech should be a priority for the system, I believe that the system the government should try to stimulate interaction between the start-ups and incumbents, probably creating some fiscal benefits to gain access to new resources. And definitely, this is extremely fundamental for the ecosystem and I think we should really try to commit to making this collaboration happen.
Barton
I think that this collaboration is not just difficult in Italy but worldwide. Maybe, Ale, what do you think are some of the obstacles for this collaboration between FinTechs and incumbents, if we look, not just in Italy, but globally?
Longoni
It’s a very good question, Susan. The reality is that we’re talking of two different breeds. We’re talking of companies that are very large on one side and companies that are quick on the other side. And this is no different in Italy from the rest of the world. On the incumbent side, you always find, more or less, the same issues. There is a lack of dedicated teams that can work directly with the start-ups. There is a lack of agility. There is an IT legacy infrastructure, just to name one, there are complex business processes that have always been that way, and a compliance centric architecture.
So, we believe, at FinTech District, that this is exactly where my team and I try and help to have an impact. For this reason, we built memberships for corporates and financial institutions who have the goal to partner, invest, and buy FinTech start-ups. And we try and help them to have this conversation and explain the ways that they should be approaching these companies, in order to create a little bit more business for both of them.
The innovation side comes from the start-ups, while the incumbents have an authority and the number of clients and the audience that is definitely necessary for the start-ups. We also worked a lot on the creation of acceleration programmes with the best local and international players, which feeds the ecosystem with growth capital before and after the acceleration programme.
This is why we’re also launching a FinTech hyper accelerator programme with larger players and partners, such as Startupbootcamp and Digital Magics in 2021, and Institution of Public Partnering in Italy. And last, but not least, we also need to create that connection between Italy and the rest of the world. It’s important for Italian start-ups to showcase what they can do also outside of Italy.
And for this reason, we decided to create the Milan FinTech Summit that is a reference event for Milan in the English language for investors and whoever might be more interested in the Italian FinTech ecosystem and potentially, also investing in it and giving young start-ups, young Italian start-ups, the chance to have more audience and to understand, a little bit better, how they can do it also outside of Italy.
Schmitz
Thanks very much, Alessandro. You just mentioned that Italians also go international. Of course, international investments are also something that is interesting for an ecosystem in a country. Alberto, you’ve been through a number of larger funding rounds and you’ve showcased not only to local investors, but also internationally. What other elements of investors would evaluate in a FinTech before investing? Is there any Italian specific angle to it?
Dalmasso
I think, in general, what investors want to see in a FinTech company they are happy to bet on is the size of the market and how ambitious the project you are trying to achieve and how ambitious the target is. Because I think that especially international investors have already come to the conclusion that in the FinTech space, you need to have a very long term approach. Being a financial product, the rate of adoption is, by design, slower than other tech products, and therefore, as you try to change the financial behaviour of an entire population, it takes time.
So, the international investors are happy to stay longer, even a 15 year approach to their investment. But because of that, they want to shrink down the number of investments they do and they want to see very ambitious products. So, products that can really target the vast majority of the population of the country or several countries. In Europe, we need to do a double step.
Not only do we have to demonstrate that we can target a single market, a single domestic market, but I think investors also really like the idea of a platform that can scale in multiple European countries. It’s not easy because actually, when you look into the most successful FinTechs, you tend to see companies in Asia, in the US, that have mainly been successful in a single market, like Alipay, which are GoPay in Indonesia, Toss in Korea, obviously, Alipay, which I’m speaking about, in China, Paytm in India.
Because you cannot address the needs of a population in such a specific way that you become the most used financial product there. in Europe, you need to try to address your own market and that’s the first thing investors want to see. But if you can show your platform is scalable and also, internationally, you can definitely track many more investors and specifically, if you think about Italy, because in my experience, we’ve been able to attract international investors, but you also need to sell the Italian story.
Because only now that the first few investors have moved into this market, it starts to be clear for many more investors that it’s quite a big economy, 60 million inhabitants with an average GDP per capita that is quite high. So, we are probably finally coming to the point where we don’t need to explain how important the Italian market is to investors, but still, I think it’s not enough to get the very big names, if you’re not showing that your platform can scale and conquer the Italian market and then go beyond that and become a European platform.
Schmitz
Thanks, Alberto. Gianluca, being involved in a number of fundraisings, any things you would like to add to this?
Magonio
Absolutely. As it was mentioned, market potential and scalability is probably the key factor that investors assess. Of course, there are other elements that have to be analyzed. In the transaction, for example, the quality of management of funders is very important, especially given that there is no historical data for a lot of these FinTechs, if the company is guided by a management that is able to convince the investor that this is a key aspect.
Having defined the strategy for the future, a clear understanding of what the main drivers are for the business is very important for a business plan, let’s say a strategic plan that must be well defined. And of course, when we do capital raising rounds, it’s also important that investors consider the cap table. So, advice we always give to our clients when they do a round, they also need to think what they would like to have in the company for future rounds.
Because strategically, financial players can have different objectives. And of course, the current cap table or the future cap table can affect decisions. So, there are different elements in addition to market potential. Scalability, of course, market potential and scalability is the main one, but there are lot of factors and elements that are also qualitative compared to assessing traditional business that are going to be put on the table and altogether, make the product picture.
Barton
We keep talking about FinTech as if it’s just a big group, but actually, there are many different smaller groups within FinTech, of course. In Italy, some of our big categories would be FinTech and InsurTech. And since we have both Simone from Yolo and Alberto from Satispay with us today, I was hoping that the two of you could talk to us about what are some of these differences between Italian FinTechs and Italian InsurTechs.
Brandimarte
Maybe I can start answering your question. There is a difference. Both areas are quite challenging. As a matter of fact, we are facing a growing demand, but still not critical mass, so there is a lot of investment to do and you really have to have a long term view. Saying that, actually, the FinTech environment is different from InsurTech. First of all, in terms of dimension, the number of companies that are operating in the ecosystem is higher, due to the fact that the market stated before, in terms of timing.
The question of investment was higher and, let’s say, digitalization of the banking system started ten years before the digitalization of insurance that is starting these days. It’s also different in terms of consumer, that it’s starting to be ready for a digital proposal for insurance, but still, insurance is not something that is a top priority for consumers, while payment and having a bank account is. So, actually, there’s a difference of readiness on the consumer side.
It’s different also for global benchmarking. There are still fewer InsurTechs globally, so the role models are less clear in InsurTech and much clearer in FinTech, if it’s coming to payment or it’s coming to banking in general. I think there are also different activities for the incumbents. So, insurance groups are starting, these days, the digitalization process, so they are enthusiastic from one side, but with less concrete action plans from the other.
While the banks are more pragmatic, they know better what they want, they are slow, as a matter of fact, but they are determined to invest in the world. And also, the collaboration models are different. In InsurTech, the relationship between insurance groups and start-ups is critical for the materialization of the business, for the operating model, it will fit them not necessarily, let’s say, my colleague will explain.
And then the last part is the skillset. Unfortunately, an InsurTech is quite up to finding people that have a digital background applied to insurance. So, we are creating everything from scratch, but still, they are both very exciting area to be these days in Italy. Alberto?
Dalmasso
I completely agree. I also believe that we can look into, probably as I see so far in the InsurTech space, there is probably more chance to cooperate. I know that insurance companies are only trying now to digitalize, but it looks like the peak opportunity comes from the margin they have, and typically, FinTech tends to be a platform that cooperates with some large insurance companies to get to the market in a different way.
While in some other FinTech areas, and especially if I may speak about payments where I’m directly involved, we see some opportunity for cooperation, but we also see a lot of competition and it looks like it’s more, probably because the market is more material, it’s face-to-face competition with incumbents. Also, because it’s even easier to get a licence to be a payment company, an e-money institution, then the license has the regulatory capital to actually be full on insurance.
So, I believe that if you look into payments and the more mature FinTech markets, we see, for many reasons, less space for cooperation and more direct competition. And I think that’s probably one of the main differences.
Barton
So, seen from the inside, what are the strengths and weaknesses of the Italian FinTech ecosystem?
Magonio
The strength of the Italian FinTech ecosystem is mainly that there is now an increased demand for collaboration by incumbents. As most of you probably know, Italy is the fourth country in Europe by number of banks, so there is a high potential of connection and collaboration between these banks and FinTech companies in the context of a growing ecosystem. Because as we mentioned before, the investment in start-ups is increasing on an annual growth rate of more than 60%.
Still, the numbers are pretty low, but they are growing, which is great. The number of start-ups is still growing. We are seeing a 27% increase on an annual basis. And the adoption of FinTech services in Italy by the public reached 51% according to the Adoption Index from EY. There are, of course, some weaknesses. One is access to capital in the sense of still some money is needed in order to make this grow. The second one is access to talent. There is a strong demand for non-financial talent.
And the third one is compliance. The Italian market is either too regulated or non-regulated and this creates a little bit of uncertainty and a high compliance cost. It’s great to see, for example, on the specific last point, that the Bank of Italy recognized this issue and they recently created a hub in Milan to help open up a conversation with the authorities and FinTech District, which is, at the moment, in direct relationship with them to help this conversation start out and potentially solving this issue.
Schmitz
Thanks very much. I think we’re coming to the end of the podcast. The last question for all of you, being industry veterans in an industry that is supposedly not that old, what’s your view on the European FinTech ecosystem growth compared to what we’ve seen in the US /Americas, and also in China? Because of course, these are economies that are extremely large, but the European economy also has 500 million plus people in it, so where do we go from here? Simone, do you want to start?
Brandimarte
I’m happy to start. Unfortunately, this vision is not one of the best at the moment as we can see, but it’s not a question of FinTech. It’s really a question of tech companies. The investment in the internal markets in the US as well as in China are somehow jeopardizing part of the opportunities that new technologies can give to the consumer globally, so there is a strong advantage, based not on talents.
Honestly, I think we are quite aligned in terms of talents and potential, but mostly, in terms of investment and in general market. In order to balance these two competitive advantages that American and Chinese companies have in respect to Europe, we should really work on the basis from one side, incentivized from the quantity of money floated to tech companies, incentivizing investment from incumbents into the companies, and supporting the development of a unique market in Europe.
Actually, as some of my colleagues were saying before, it’s really complex at the moment, but not impossible to plan and to implement. So, if these are three things that then mention, maybe there are some other additional elements that could materialize, I think the situation will improve and the opportunity for European FinTech will be as positive as the one for America and China. Otherwise, I think we will not be able to have a protagonist role. That’s my advice.
Schmitz
Alessandro, as the head of FinTech District, what’s your view?
Longoni
I very much agree with Simone. Europe is a process and a project in the making, if I have to define it, and one of the things that has to be addressed the soonest is definitely the fragmentation in being in different countries and different approaches from a taxation perspective, from a VC perspective, and everything that can help companies to grow.
I’m going to go back for a second to Italy and to Italian companies and the strive to grow these days. Italian companies and FinTech companies, especially, tend to solve local problems. And this is also one of the reasons why the investments didn’t flow into the country. But now entrepreneurs have understood the need to change and switch their mindset and Alberto very well explained that companies now need to be European.
So, if entrepreneurs start thinking European, the European Commission starts thinking about a real European role, then in the end, we’re going to have a real market that can compete with Asia and America. But as I mentioned, it’s a process in the making and I’m very much positive and believe that we’re going to have some interesting results in the coming years.
Schmitz
It sounds like there’s also a role for regulators, for the government, for the EU Commission to probably propagate the usage of FinTech, and also, give a good environment to the FinTechs and InsurTechs in Europe to really start growing outside of their own economy and leverage what we see as the European economic area. So, there’s a lot of potential, I understood that. And we’re all looking forward to this with high interest and trying to understand where we are all going.
Unfortunately, we have come now to the end of today’s episode. We’ve covered a lot of ground and I, personally, could have gone on for even more time, learning a lot about the specifics of the Italian FinTech ecosystem. Great thanks to Alberto, Simone, Ale, and Gianluca for being with us today and providing these exciting insights into the Italian FinTech ecosystem. A big thanks, also, to Susan for inviting our guests and driving all the preparation around this episode.
As we perceive this podcast to be a platform, we want you, our listeners, to be able to interact with us. If you have questions or comments for this podcast or for today’s guests, please don’t hesitate to send us your feedback via email to eyfintechbeyondborders@uk.ey.com.
We will also provide a link to the EY FinTech Waves report, so that you can look up the figures that have been quoted in this podcast. In case you would like to have themes covered in this podcast or even be a guest yourself in an episode, please let us know. Thanks very much again to all of you today and we’re looking forward to having you back in our next episode of FinTech Beyond Borders. Again, thanks to our guests and see you soon.
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