Fintech after the Apocalypse – which never happened

In recent decades, fintech has evolved from a disruptive outsider to a catalyst of the financial system’s transformation. Initially seen as a threat to traditional banks, fintech has instead become intertwined with them, creating a hybrid ecosystem that combines agility and innovation with stability and trust. The result is a more efficient, competitive, and user-centric financial system.

The doomsday narrative of startups set to wipe out established financial institutions proved unfounded. Banks reacted swiftly, investing in technology, partnering with digital newcomers, and in some cases, acquiring them. Fintech companies, in turn, gained access to resources, expertise, and customers. What has emerged is not a story of replacement, but of co-evolution, a dynamic that strengthens the system as a whole.

What exactly is fintech?

According to the Bank of Italy, fintech is “financial innovation enabled by technological innovation.” It’s not just about new digital payment apps, it represents a structural transformation that reshapes services, products and business models in the financial sector.

At its core, fintech is the convergence of finance with technologies like artificial intelligence, blockchain, big data, and cloud computing, aimed at making financial services faster, more accessible, and more personalized.

A long journey in the making

Fintech’s roots go back well before the internet. In the 1950s, with the introduction of credit cards, and then in 1967 with the first ATMs, technology began changing the relationship between people and finance. A major turning point came in 1971 with the launch of NASDAQ, the first electronic stock exchange, which inspired the rise of online trading platforms, including in Italy.

In the 1990s, the internet accelerated the globalization of financial services, making transactions faster and more accessible. Then, in 2008, blockchain technology introduced a new paradigm of security and transparency, laying the groundwork for innovations like decentralized finance (DeFi).

Compared to countries like France and Germany, Italy has lagged somewhat in fintech development, partly due to uneven digital infrastructure and a financial culture still rooted in traditional channels. However, in recent years, spurred in part by the pandemic, there’s been significant growth in the adoption of fintech services.

Milan has emerged as a leading innovation hub, with companies like Satispay and Scalapay helping to drive the sector forward.

The regulatory framework is also evolving. Alongside the PSD2 directive, and ahead of the anticipated PSD3, Italy is adjusting its legislation to comply with MiCAR, the European regulation for crypto-assets. The IT Wallet is a first step toward a fully digital ecosystem for public and financial services.

Italy’s fintech ecosystem, like those of other countries, includes:

• Fintech startups, the main drivers of innovation.
• Tech companies, which provide infrastructure and solutions.
• Traditional financial institutions, increasingly involved through investment, partnerships, and acquisitions.
• Investors, essential for startup growth.
• Regulators, tasked with balancing innovation and consumer protection.
• Consumers and businesses, whose needs steer innovation.

Among the fastest-growing segments are digital payments, now part of our daily life, and wealth management, where digital tools are making personalized financial services more accessible. InsurTech is also expanding, reshaping how insurance services are delivered and tailored. Meanwhile, technologies like AI and big data are revolutionizing risk management, fraud prevention, and offer personalization.

Looking ahead: development drivers and future potential

Italian fintech has a promising future, but targeted action is needed to sustain its growth. Improving access to technology, lowering investment barriers for startups, strengthening financial literacy, and ensuring a regulatory framework that is both stable and adaptable will be key.

Regulation must keep pace with innovation, promoting a balance between protection and progress. Fintech is the future of finance, and Italy still has the opportunity to play a leading role.