The Fintech District is an open ecosystem that launched in 2017, aiming to foster the development of the fintech industry in Italy. In just over two years, located in an iconic building in Milan, they have been able to attract a large community composed of national and international stakeholders, including not only fintech startups, but also financial institutions, investors, corporations, public institutions and established relationships with a good number of European innovation hubs.
Here I spoke with Alessandro Longoni, the Head of Fintech District, about current and future ambitions with its community, the status of the Italian fintech startup ecosystem, how they’re coping with the current Covid-19 emergency and what he sees in the future of financial technology.
Ciao Alessandro, very happy to have you here. Could you kindly give us a brief introduction about yourself?
Thank you for the invitation! Professionally, before taking responsibility for the Fintech District in Milan, I worked in London for 5 years on global digital innovation and business development in companies like Vodafone and Samsung. During my life in London, I worked on projects like bringing Samsung Pay to Europe, participated as a mentor in programmes such as Startup Bootcamp and House of Genius, and grew my contacts in the ecosystem. Then I proudly decided to dedicate 1 year of my life traveling, when I had the opportunity to visit 8 different countries. In my free time, I love practicing sports and playing with anything digital.
Fintech District started in Milan about two years ago. How many members do you have at the moment? How have things evolved since then and what do you see in the future?
Fintech District is an international community, based in Milan, in a building that has become an iconic point of reference for the innovation ecosystem in Italy. We operate to create the best conditions for all stakeholders (startups, financial institutions, corporates, professionals, institutions and investors) to operate in synergy and find opportunities for local and international growth. Today our community is strong with 143 fintech companies, 14 corporate members that are supporting our activities, 8 professionals providing advice to our members, and is connected with 10 international fintech hubs across the EU, with many more actors involved in the day-to-day activities. In 2 and a half years, we have grown considerably, mirroring the fintech sector in our country. We aim to reach 150 fintech companies in our community by the end of 2020 and we believe that we can also play an active role in putting Milan at the center of European and global attention.
Are there any particular fintech startups in Italy that we should keep an eye on?
In our community we accept fintech companies that have at least 1 employee, 1 product and 1 client, with operations or legal headquarter in Italy after a thorough assessment. This means that we have both Italian and non-Italian companies.
There are well known international fintech companies such as N26 and Revolut, which have their Southern European Headquarters based in Milan. Among the Italian fintech companies, some of them are achieving excellent results and expanding in Europe such as Satispay and Moneyfarm. Then Credimi is an excellent example of a digital factoring solution. There is also an interesting case of proptech scaling outside of Italy: Walliance. In February 2020, we also had an important exit in our community: Moneymour was acquired by the Swedish bank Klarna. We can definitely say that the startup ecosystem is vibrant and lively!
Tell us a bit about the startup ecosystem in Milan. What are its unique aspects? Where do you see more room for improvement?
In Milan, the fintech startup sector is still in an early stage, but is developing well and growing, making up approximately 40% of the total 300 fintech companies in Italy. We believe that the ecosystem has all the potential to be a point of reference for Southern Europe. At the same time, in Milan, there is still a very small number of scaleups with more than 50 employees (5% of the 80 companies that were born in the last 5 years). It is well known that scaleups are the driving factor in terms of impact, turnover and employment growth. For this reason, the Fintech District team is encouraging the creation of synergies between companies, investors and the development of open innovation projects: these are going to be the forces behind the growth and the improvement of the ecosystem.
How have you and your members been affected by the current challenging situation with Coronavirus? It’s very hard to make any forecasts now, as the whole situation is still evolving, but how do you think the Italian startups ecosystem will overcome this period?
It is an unprecedented and serious situation; businesses globally are changing their approach to tackle this crisis in a very short time frame and effects will be seen in and for months. We have already experienced a sharp shift to “smart working”, for example, and everyone is learning how to be more effective remotely in a country where work has always been traditionally face-to-face, or in person. Our industry (fintech) is probably more prepared than others for this shift and still, it has indeed suffered an impact. However, in overall, the first reaction we have seen has been proactive: our community (both fintech startups and corporate members) has come together with a number of initiatives to support the fight against COVID-19 either via fundraising or via free advice. We believe this is a pragmatic and generous approach and we have taken action to aggregate all the activities in this article “The Power of Fintech Community”.
Italy as a country needs now to answer the emergency in the short term by making a leap forward and become more digital. Fintech companies have a strong know-how in technology and innovation and most likely they will find more space in people’s lives also when the emergency will be over.
For those interested in setting up a fintech startup in Italy, what are the conditions? Any specific public or private support programmes in place?
It’s no different creating a fintech than a company from any other industry in Italy. However, the fintech industry is living through a very positive phase, with attention from the regulator who recently set up a sandbox to help the development of new companies and use cases. As of today, accelerators like Startup Bootcamp, Plug ‘n Play, and Magic Wand by Digital Magics are probably your best option for a soft landing platform in Italy. At the same time, we believe that the country can do more. And for this reason, we are setting up a collaboration with Milan’s Council in 2020 to provide easier access to institutions, reduce unnecessary bureaucracy, offer most services in a digital form and help startups to set up a base in Italy.
The last time we spoke you told me about the European Fintech Discovery Program, aiming to connect various fintech hubs in Europe. Can you tell us a bit about that? How are things progressing?
As I mentioned earlier, we have a collaboration with 10 different Fintech hubs in Europe, and the European Fintech Discovery Program was our way to bring to market a structured programme. Every participating fintech hub can offer to its corporate customers the opportunity to visit other ecosystems and discover new fintech solutions. A corporate customer can browse the content on this page, select a category of interest, visit up to 4 hubs in Europe, meet 20+ startups and get a final report of the discovery trip. This showed great collaboration across different countries and gathered a lot of interest as the first Pan-European ecosystem collaboration.
The line dividing fintech startups, financial institutions and big tech companies is getting very blurred. How do you see this developing? How will fintech will look in 5 – 10 years?
Especially after the introduction of the PSD2, relationships between startups, financial institutions and big tech have changed. We are moving towards even greater cooperation. In order to remain competitive, traditional banks must innovate and can do so by opening up to collaborate with fintechs, which are flexible and often very vertical. This verticality is more capable of satisfying the specific needs of the end customer effectively and quickly. In 5 or 10 years we imagine a fintech sector with fewer but more established players and with countless collaborations in place between fintechs and incumbents. Banking will become modular and customers will reap the benefits of this collaboration, as they will be able to take advantage of increasingly personalized services at competitive prices.
What do you read to keep up with news and innovation? Are there any podcasts, blogs or publications, covering Italian fintech startups, that you particularly like and that you want to suggest to our readers?
I have a big advantage compared to most of you when it comes to podcasts, blogs and publications: I can understand Italian! : )
In fact, most of the communication on the market is done in the local language by players such as Fintastico. The work done locally is great, but it’s only for those speaking Italian. For this reason, we have on our website news in English that reports on both new companies that are accessing our community and successful collaborations among our members. There you can find also a guide about the Italian fintech ecosystem, which is possible to browse directly online. Then, of course, our newsletter and social channels are a good way to be updated on everything that is happening in Italy in the startup ecosystem.