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There is a heated discussion in the Italian media about the future of the country's banking system. The first blow was struck by Alberto DALMASSO, founder of Satispay, an electronic payment system. Last year was a period of unprecedented rise for one of the leaders in the field of financial technology: the number of clients increased from 230 thousand to 500 thousand, 70 thousand trading enterprises were connected to the system and the annual turnover increased four times, reaching 20 mln euros.
Satispay was established in 2013 and has become the undoubted FinTech leader in the financial sector, which only leading Italian banks can outpace. One of its advantages is the low cost of services: when paying for an amount of fewer than 10 euros, the service is free; if you pay more than 10 euros, the cost of the service is fixed and amounts to 20 euro cents. In addition, the client (retailer) does not need to install electronic payment terminals, change or modify cash registers or also change the bank - the money goes to the account on the next business day.
Satispay's strength is that it is directly related to the client, while other similar systems are tied to banks. Alberto DALMASSO gives this example:
“Visa and MasterCard are in bank captivity: if banks find out that they intend to create products directly related to the customer, then they will get rid of them.”
The initial idea of Satispay was to deprive traditional banks of intermediary functions, and partly the company succeeded since the most flexible and dynamic banking structures preferred to cooperate. However, according to their management, the Italian Banking Association that regulates the banking market, looks at them with suspicion, stating that fintech needs strict regulation since this sphere cannot remain the “Wild West”. Alberto Dalmasso believes that the motivation for this position is that bankers view FinTech as a successful competitor who threatens 300 thousand jobs in the banking sector.
The threat is quite real, because for six months (from September 2018), Satispay customers saved 6 mln euros on banking services, that is, 1 mln per month. However, Satispay is engaged not only in gaining a stake in the banking sector but is also going to expand its own field of activity further — from the insurance business to investment management. In four years Satispay is going to go public.
Giovanni SABATINI, General Manager of the Italian Banking Association, counters the blow:
"According to our data, 31% of all enterprises in the sphere of fintech do not fall under any control or regulation, and 8% are difficult to classify at all."
Mr. Sabatini denies the overall hostility to fintech by Italian banks, arguing that 60% of banking institutions have taken the initiative to cooperate with companies operating in the field of fintech.
Regarding the figure of 300 thousand jobs in the banking sector, potentially at risk of reduction due to the expansion of FinTech, Mr. Sabatini did not answer this question directly, saying only that the risks are difficult to assess, while untested and overvalued figures are often discussed.
Thus, at the present time, a shaky truce has reigned in Italian banking, but it is unlikely to grow into a tension relief and peaceful coexistence.
Image courtesy of MEDICI
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