Online banking is seen with favor by the legislator, both at EU and Italian level, and several existing regulations, like the one related to electronic identification, are able to foster the development and the use of such services as an alternative to the traditional relationship between banks and their consumers. Particular attention has been paid, and will likely be paid in the next future, on issues like data protection and cybersecurity that might deeply influence to provision of online banking services.
Economic conditions
Market size for online-banking services and biggest companies in this business area
According to the last Bank of Italy Annual Report, about 48% of Italian families make use of online banking services at the end of 2024; an increase over previous years also due to the pandemic. This represents a further step into the digitalization of consumer banking, as mentioned by the banking regulator under that report.
As a current trend, the main local banking groups are moving online significant part of their services. On the one hand, incumbents are undergoing an in-depth review of their existing business models to make them more open to digital innovation and the FinTech mindset, also by making extensive use of outsourcing to IT providers.
On the other hand, new entrants are setting up innovative online platforms and starting fully digital banking firms (see for example Illimity Bank: a newly authorized and entirely online bank, focusing on small and medium enterprises lending and on NPLs trading.
Additional comments regarding the economic situation for online-banking services or what FinTech’s must be aware of in this business area
Based on the last Bank of Italy’s Report on FinTech Investments, the area where the major local banking groups are deploying most of their 2024 IT budget is on selling platform and mobile services.