Fintech and insurtech's direction: balancing eco-friendliness, advancements, and digital clientele
In the dynamic world of banking, finance, and insurance, digitalization, startups, and sustainability are driving transformative change. These elements were the focus of the recent 2024 Conference of the Politecnico di Milano Observatory.
Digitalization is recognized as a fundamental enabler for innovation and transformation in these sectors. It drives efficiency, improves customer experience, and fosters new business models by leveraging data analytics, AI, and advanced digital tools. Startups, particularly in fintech and insurtech, play a crucial role as innovation drivers, introducing cutting-edge digital solutions that established players can adopt or integrate.
Sustainability has become a strategic priority, intersecting with digital transformation. Sustainable finance and insurance practices are increasingly embedded in organizational strategies, reflecting the growing regulatory and societal expectations to address environmental, social, and governance (ESG) criteria. The synergy between these three elements is reshaping traditional banking, financial, and insurance services towards more resilient and responsible models.
The conference presentations emphasized the interplay between these elements. Digitalization boosts the capabilities of both incumbents and startups to respond to sustainability challenges, while startups accelerate the adoption of sustainable finance innovations. Corrado Passera, who spoke at the Final Conference, believes that these institutions will be better prepared to face future challenges.
The Italian Fintech landscape is more vibrant than ever, with 596 operational entities. In 2024, startups raised 250 million euros, and many collaborate with traditional banks and insurers, fostering ecosystems where innovation thrives. The new regulations DORA (Digital Operational Resilience Act) and FIDA (Financial Data Access) are designed to strengthen digital resilience and improve access to financial data.
However, the sector still faces challenges. Only one in four consumers feels comfortable providing personal data such as payslips through digital channels. Overcoming the reluctance to share personal data requires building trust through transparent communication and demonstrating concrete benefits for customers.
Balancing sustainability, digitalization, and customer focus will be key to prospering in an ever-evolving world. While 74% of sector players consider ESG themes fundamental for the long term, only 24% of entities adopt sustainability as a strategic pillar. This discrepancy suggests that there is room for improvement in aligning business strategies with societal and environmental concerns.
The future of Fintech and Insurtech hinges on the courage to tackle global challenges and seize innovation's opportunities. An integrated approach combining digitalization, new technological solutions, and business and consumer needs is crucial for success. As Passera noted, these regulations will not limit the evolution of the sector but will offer many opportunities for innovation.
In conclusion, the 2024 Conference of the Politecnico di Milano Observatory highlighted the pivotal role of digitalization, startups, and sustainability in shaping the future of banking, finance, and insurance. The sector is evolving towards more resilient, responsible, and customer-focused models, and the courage to embrace change will be a defining factor in its success.
References:
[1] Politecnico di Milano Observatory. (2024). Digital Transformation in the Banking, Financial, and Insurance Sectors: The Role of Startups and Sustainability. Retrieved from https://www.polimi.it/en/research/departments/di-dts/research/research-areas/fintech-insuretech/
[3] Politecnico di Milano Observatory. (2024). ESG Integration in the Italian Financial Ecosystem. Retrieved from https://www.polimi.it/en/research/departments/di-dts/research/research-areas/fintech-insuretech/esg-integration-in-the-italian-financial-ecosystem
Technology plays a significant role in driving innovation within business and finance through digital tools, data analytics, AI, and other advanced solutions. These technologies help improve efficiency, customer experience, and create new business models.
Startups, especially in fintech and insurtech, are critical catalysts for change, introducing innovative digital solutions that traditional players can adopt or integrate. Such partnerships foster thriving ecosystems that encourage further innovation.
