For 80% of players, the "open" paradigm enabled by platforms is the main transformation driver in the sector. The presence of fintech operators expands: in the next three years they will be protagonists of the "bank as a service" turning point 04 Apr 2022
The “open” paradigm drives the transformation of financial ecosystems. The photograph is taken by the study carried out by The European House - Ambrosetti, Fabrick and illimity according to which 81% of the players in the sector - over 650 Italian and international players have been interviewed - consider the Open Banking and Open Finance paradigms to be the main evolutions of the sector. sector. Index of topics • The state of the art • The challenges of open ecosystems The state of the art Ecosystems at the EU level have seen the birth of 19 Fintech unicorns, with an overall valuation of 101.8 billion dollars. In particular, the Italian ecosystem can count on the growth of Milan as the country's main innovation hub also in the Fintech field, occupying 61st place in the world ranking of Fintech cities (first Italian city). Milan hosts over 10 thousand financial companies with 70 thousand employees and is the first Italian city for the number of startups and innovative SMEs (2,688, equal to 19.2% of the total in the country). Incubators, accelerators and top-level districts such as the Fintech District contribute to the growth of the Milanese innovation hub. The Bank of Italy has also created a very important initiative in the sector, Milano Hub, an innovation center to support the digital evolution of the financial market and encourage the attraction of talent and investments. There is also the Fin + Tech initiative launched by Cassa Depositi e Prestiti together with other actors: a Fintech and Insurtech accelerator that in March 2022 selected 16 promising startups (out of over 300 applications) which were offered an acceleration path with a duration of 4 months and an investment follow-on of up to 300 thousand euros.
The challenges of open ecosystems To date, a financial company must be able to offer its customers much more than it can with the resources at its disposal. To do this, it is necessary to join an ecosystem enabled by a platform. The adoption of this approach is not easy for a traditional company as it requires exploring new models of cooperation with other subjects, even apparently very distant in terms of the value chain. In terms of adoption of the platform model, the results of the survey testify to an important level of participation of Fintech players in Open ecosystems for the development of new financial solutions (61%) and the collaboration of banks with Fintech players for the development of new products (36%). It is interesting to note that 35% of Fintech companies have a disintermediated business model from another actor, represented by a bank (in 40% of cases), by a non-financial actor (29%) or by a Neobank (25%). Finally, 43% of Fintechs see themselves as an integral part of a platform ecosystem over the next three years. "The technological evolution we are witnessing offers enormous opportunities for the development of new value ecosystems based on platform models. In the financial field, data, APIs and artificial intelligence must be considered the tools underlying new value offers and new business models - explains Valerio De Molli, Managing Partner & CEO of The European House - Ambrosetti - In this sense, the more than 650 stakeholders, involved in a unique research work of its kind, confirmed the need to direct the development of a Platform as a Bank ecosystem ". In particular, the Embedded Finance model which enables non-financial players to integrate financial services into their offer to create new business models, in a highly regulated and highly technological environment. Embedded Finance allows you to manage the three main elements underlying the creation of new value offers in a different way: • Knowledge - to dynamically and continuously aggregate and analyze data on which to design new financial products and services by non-financial actors; • Interaction - develop new experiences for the management of transactions between economic operators (including non-financial ones) towards ever greater integration, for example in the retail payment, microcredit and insurance sector and in the corporate sphere, collections and payments, reconciliation, management treasury and tax obligations; • Identity (of individuals and legal entities) - manage transactions with greater security, overcoming the criticalities of current models. Furthermore, the concept of identity will have to evolve by aggregating additional sources of information useful to the specific The activity of listening - which also involved ItaliaOnSite, Bene Assicurazioni, Moneyfarm, Faire.ai, CashDirector, Lokky, Directa.it, Credimi, Prestiamoci, Crea Assicurazioni, Net Insurance, Reale Group - allowed to identify six key benefits, obtained by companies thanks to to the adoption of the Open Finance paradigm. In particular, the benefits referred to are: efficiency and effectiveness, immediacy, better multi-channel management, personalization, certainty and compliance, development of new business models and expansion of the customer base of financial products. For example, the actors have exploited Open Finance solutions to improve the management of incoming and outgoing credit transfers by customers, obtaining a reduction in transaction costs of 90% with benefits also in terms of compliance. In other cases, access to smart solutions for the reconciliation of operations has made it possible to obtain cost advantages of 80%. The adoption of Open Finance solutions to speed up the execution of trading orders has made it possible to reduce the availability of resources on the trading account to just over 10 minutes after receiving the transfer; in this sense, the improvement compared to the 24 hours necessary before this new one is evident. Finally, starting from the ever-increasing diffusion of Open Data, some important technological trends have been identified that could influence the three main elements underlying the creation of new value offers in the financial sector: • Interaction - possible evolutions linked to the diffusion of Central Bank digital Currency (Cbdc) and the diffusion of new digital paradigms and relationships between network “objects” based on blockchain; • Knowledge - the role of financial information and financial operators within the federated data models that can contribute to the realization of digital twins; • Identity - suggestions regarding the extreme development of a virtual reality inspired by the concept of Metaverse. The development of these three verticals underlying the creation of value in the Open Finance ecosystem is enabled by the platform logic: thanks to the aggregation of data and the collaboration between players who offer different solutions, even in different sectors, it is possible to obtain new experiences. and services / products with high added value. The platform logic allows to overcome the existing silos and to expand the databases by integrating different solutions: the actors of the financial ecosystem will be able to further develop the Open models through the concepts of interaction, knowledge and identity that are increasingly evolved and governed by digital, obtaining a role in the more general evolution of the Data Economy paradigm. "The revolution underway, which no longer involves only the world of Open Banking but also that of payments and other financial services, has gone far beyond what was hoped for with the introduction of the Psd2 - highlights Paolo Zaccardi, ceo and co - Fabrick's founder - The opening of the market to new players and the consequent increase in competition has raised the level of quality of the services offered for the benefit of end customers who can benefit from immediate and more convenient digital services with a highly personalized customer experience . New business models, such as Embedded Finance and Banking-as-a-Service, are now well established and companies from any sector can integrate financial services into their offerings. The open platform model is the key to creating value and staying competitive, facilitating the co-creation of products and services. At Fabrick we have built an open ecosystem around our Open Finance platform to bring value to every company, bank or Fintech that chooses to seize this opportunity ". For Carlo Panella, head of Direct Banking at illimity: "Research demonstrates how Open Finance is the winning paradigm for addressing the ongoing financial and digital transformation". "This is the model behind all the initiatives that illimity has launched since its inception and that led to the creation of b-ilty, a real example of" bank as a platform "- he explains - Designed inspired by non-financial platforms, b-ilty is a digital business store entirely dedicated to SMEs that collects all banking operations in a single ecosystem to support customers with customized solutions built according to the specific needs of the company. The aim is to combine all the products and services of a complete digital bank with those of selected non-bank partners. With b-ilty and beyond, we aim to redefine the frontiers of banking to create an inclusive model made up of synergistic services and based on new forms of collaboration. The results of this research confirm once again that the direction in which illimity is going is the right one ”.
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