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2018-2022: Fintech, Act II
By Mario Costantini, Head of Innovation Department Intesa Sanpaolo and CEO DI Neva Finventures
The first phase of Fintech (2012-2017) has seen the rise of thousands of innovative startups, often lead by professionals with relevant experience in this field, who threw down the gauntlet to the whole industry by introducing a higher level of competition. This was a great phase of experimentation, with new services and business models created and launched on the market. Incumbents had the chance to appreciate new ways of doing business and often incorporated talent and tech coming from startups (1500+ M&A operations took place in the last 5 years); newcomers had the chance to tap into previously underserved segments, becoming, in the most successful cases, players that are here to stay (today 27 fintech unicorns exist).
In this phase we have worked hard to set up the network of national and international partners (universities, incubators, accelerators, venture funds, business partners), developing methodology and instruments (e.g. Observatory of new innovative trends, technologies and startups—Corporate Venture Capital Fund: Neva Finventures–Design Thinking capabilities) and creating our top skilled team to master the Open Innovation in our company.
Fintech ecosystem is going to be consolidated, with innovation hubs in every continent and a common language shared by all actors. Collaboration now represents the norm to accelerate innovation
We have worked on the brand new internet banking website and mobile app and exploring emerging technologies as well. We have worked hard with the business and IT department and introduced many innovative services to our customers. We are very proud of the achieved results.
Under this light, what might look the future of Fintech? Without demanding to foretell, for the forthcoming years (2018-2022) there’s a set of elements shaping a new paradigm. The Fintech ecosystem is going to be consolidated, with innovation hubs in every continent and a common language shared by all actors. Collaboration now represents the norm to accelerate innovation. In Europe, regulators are promoting innovation (also thinking about Regulatory Sandboxes for testing new services), transparency (e.g. MIFID and GDPR) and a greater competition (PSD2) within the ecosystems that may represent a great chance for innovative banks to get new customers. The shift is toward the open banking paradigm: we’re moving from a centralized to a more distributed ecosystem.
Digital technology is surely the key enabler of this transformation, but technology alone is not enough: most companies are re-organizing themselves, by removing siloed operations in favor of a collaborative environment. With regards to Intesa Sanpaolo, close collaboration between all the banking stakeholders involved in innovation is the key element to allow the adoption of innovative solutions and products on a large scale. For this reason, a rethinking of the management of innovation is underway: IT, Data and Innovation are coming together under a single area, thus creating a single reference point for Business and Technology.
In this framework, for instance, the Innovation Department manages the innovation ecosystem and stimulates the “innovation appetite” of the other banking stakeholders by showing them periodically, the trends, business models and possible new solutions to get their full engagement and providing new services to customers. Understanding deeply the business needs and work together with the Business and IT, allows analyzing the return on investment, designing and developing of new solutions, along with driving innovation ideas to actual services for our customers. We deem that Fintech is, first of all, a huge opportunity for banks; fast and large scale adoption will be our next challenge to thrive in the “Act II” of Fintech. Neva Finventures, our Corporate Venture Capital Fund, will be crucial for this objective to become more and more attractive for startups and to create value.