A snapshot of the fintech in Italy: a small but growing sector with a huge potential

Italian Fintech sector has“huge potential”(EY) for investors and start-ups

Investors and fintech experts are looking at Italian Fintech for its massive growth potential. EY has chosen to highlight the future growth of the Italian Fintech sector in their latest report, according to them the sector has “huge potential”. The Italian fintech ecosystem has grown from 16 players only in 2011 and more than 300 companies today, with the market divided between Fin Tech (76%) and Tech Fin (24%) companies.

The five largest segments are crowdfunding, DNA ML AI, smart payment and money transfer, lending and insurtech.

fintech by region

Fintech Geography in Italy

Among all the regions in Italy, Lombardy emerges as a leading region for the number of ventures, with 169 HQ out of the 345. This can be easily explained by an extremely start-up friendly ecosystem, capable of putting together talents, accelerators and funds, by a well-developed financial and insurance district and by a high degree of openness towards the innovation. To complete the overview about this market, with a closer look also at the customers’ point of view, it has been reported that the adoption rate for fintech services is growing (51% in Italy vs 64% in Germany and 35% in France). In terms of the segments before mentioned, meanwhile in the other European countries, customers tend to be more oriented towards money transfer and payment services, in Italy the focus appears to be on fintech insurance services.

 

Opportunities for Investors: Open Banking, Lending, Wealth Tech and Insur Tech

One pivotal theme highlighted by the research is the way start-ups are funded -personal resources, business angels and CVC are the first three most adopted ways to gather funds – setting against the desire for international VC funds to growth and scale-up internationally.

EY’s observations about future growth potential suggests that Lending, Open Banking, Wealth Tech and Insur Tech have enormous growth potential, this implies investors should be looking at investing in these sectors

The level of maturity and the growth stage reveals how the sector is at an early stage with plenty of room to growth: around the 90% of the start-ups reported that they have not yet completed the “early growth” stage.

To complete the overview about this market, with a closer look also at the customers’ point of view, it has been reported that the adoption rate for fintech services is growing (51% in Italy vs 64% in Germany and 35% in France). In terms of the segments before mentioned, meanwhile in the other European countries, customers tend to be more oriented towards money transfer and payment services, in Italy the focus appears to be on fintech insurance services.