Fintech and insurtech's path forward: balancing sustainability, progressive advancements, and digitally-savvy clients
The banking, financial, and insurance sectors in Italy are undergoing a significant transformation, with over 596 operational fintech entities shaping the vibrant landscape. This transformation was the focus of the 2024 Conference of the Politecnico di Milano Observatory, which emphasized the critical role of digitalization, startups, and sustainability in driving this change.
The conference highlighted the need for a balanced approach that combines digitalization, new technological solutions, and business and consumer needs. Balancing sustainability, digitalization, and customer focus will be key to thriving in a constantly evolving world.
Two key regulatory challenges, the Digital Operational Resilience Act (DORA) and the Financial Data Access (FIDA) regulations, were discussed. The sectors were encouraged to adopt innovative risk management and compliance frameworks integrated with digital technologies to meet these stringent requirements. Startups and technological innovation, with their agility and advanced tools, are seen as crucial in meeting these standards, particularly through AI-driven operational resilience and secure data sharing.
Sustainability is integrated as a core dimension of this transformation. Firms are aligning digital innovation goals with environmental, social, and governance (ESG) objectives to ensure long-term value creation while responding to regulatory pressures and societal demands for responsible business practices.
The conference also underscored the importance of trust in overcoming barriers to digital adoption. This can be built through transparent communication and demonstrating concrete advantages for customers.
The future of Fintech and Insurtech depends on the ability to bravely tackle global challenges and seize the opportunities offered by innovation. Startups are confirmed as the driving force behind the transformation in the sector. In 2024 alone, startups raised 250 million euros, demonstrating their significant role in the industry.
The conference also noted that many startups collaborate with traditional banks and insurers, creating ecosystems where innovation thrives. However, only 24% of businesses adopt sustainability as a strategic pillar, and 76% of businesses do not consider KPIs on sustainability.
In terms of consumer adoption, 74% of Italians regularly use home banking, and 65% use the apps of their banks. However, only one in four consumers feels comfortable providing personal documents like payslips through digital channels, indicating a need for improved trust and security measures.
Some financial realities have chosen to share value with shareholders and stakeholders, while others have reinvested profits in innovation and technologies. The banking, financial, and insurance sectors have shown a positive trend in terms of margins and profits over the last 5 years.
In summary, the conference underlined a comprehensive strategy where digitalization, supported by startup-driven innovation and sustainability considerations, equips the banking, financial, and insurance sectors to anticipate and respond to future challenges like DORA and FIDA through enhanced platform thinking and digital resilience. This transformation is framed within the concept of “Platform Thinking,” a strategic approach that supports firms in rethinking business models around digital platforms to generate lasting impact.
Investing in technology and digitalization is crucial for businesses in the banking, financial, and insurance sectors to stay competitive, as underscored at the 2024 Conference of the Politecnico di Milano Observatory. Balancing this focus on technology with sustainability and consumer needs will be essential for success in a rapidly evolving world.
Collaboration between traditional financial institutions and startups plays a vital role in shaping the future of Fintech and Insurtech. These collaborations can help create ecosystems that foster innovation, as evidenced by the 250 million euros raised by startups in Italy in 2024 alone.
