In the wake of the tumultuous year that was 2020, the business world has undergone a profound transformation. Long-standing business practices have become obsolete, and unforeseen changes have reshaped the landscape. In this article, we embark on a journey to explore the trends that are poised to shape the business landscape as we approach the year 2025.

Regtech and the Compliance Imperative

Within the boardrooms of both the financial and non-financial sectors, conversations continue to revolve around regulatory compliance and the ever-looming specter of cybersecurity breaches. Enter Regtech is a sector that holds the potential to demystify the intricacies of compliance, particularly in heavily regulated fields like finance. According to Juniper Research Global, Regtech spending is expected to surge beyond an astonishing US$204 billion by 2026. Notably, a remarkable 25% of digital onboarding processes in the banking sector are projected to harness AI systems by 2026, marking a significant leap from the mere 8% recorded in 2022. However, it’s important to note that in the Italian market, the full potential of advanced analytics in regulatory activities remains largely untapped. To address the growing complexities of regulations, Italy must shift its perspective, transforming compliance from a perceived burden into a potent competitive advantage.

Cybersecurity Vigilance and Insurance

While Italy has witnessed a notable surge in awareness and investment in its cybersecurity market, the figures reveal a concerning trend. Over the span of 2018 to 2022, Italy’s expenditure on the cybersecurity market increased steadily. By the conclusion of this period, Italy had directed approximately 1.86 billion euros into the cybersecurity sector, representing an 18 percent increase compared to 2021. However, despite this growth, it still falls significantly shortwith respect to other countries, allocating only 0.08% of its GDP to reinforce its digital defenses. As a result, Italy finds itself trailing its G7 counterparts in the ongoing endeavor to fortify its resilience against evolving threats. It is, therefore, imperative that the cybersecurity sector and its collaboration with cyber insurance receive heightened attention and cooperation to effectively safeguard the nation against these persistent and ever-evolving challenges.

Wealth and Asset Management: Navigating a Changing Landscape

The wealth and asset management sector currently faces a whirlpool of fierce price competition, shrinking profit margins, and rising management costs. To successfully navigate these turbulent waters and sustain profitability, technological innovation stands as the lifebuoy. Advanced analytics, data analysis, personalization, and intelligent robotic process automation hold the promise of optimizing efficiency and productivity. A noteworthy transformation is underway, as the sector shifts from its previous goal of disintermediation to a new mission of enhancing the effectiveness and profitability of financial advisors through Digital Wealth Management Platforms.

Insurtech’s Resilience and Growth Potential

Despite fluctuations in valuation, Insurtech companies have managed to secure a substantial customer base. Their path to success hinges on the refinement of risk models and the improvement of loss ratios. By collaborating with established industry players and specializing in specific verticals, Insurtech firms can further accelerate their growth. As the insurance sector grapples with mounting complexity driven by global factors like climate change, aging populations, and disruptive technologies, innovative risk mitigation strategies become increasingly vital.

SME Lending Platforms: Catalysts for Economic Empowerment

SME lending platforms have matured and are poised to play a pivotal role in providing Small and Medium Enterprises with equitable access to rapid credit scoring. Fintech companies specializing in SME lending are projected to continue their upward trajectory, offering white-label solutions to existing financial institutions.

Open Finance’s Journey from Open Banking

The evolution of Open Banking into Open Finance has encountered obstacles in Italy, primarily stemming from cultural constraints rather than regulatory hurdles. The abundance of APIs and an expanded service portfolio are the driving forces behind Open Finance’s growth, aligning it with the evolving demands of customers. The key to successful implementation lies in transparency and delivering tangible benefits to end-users.

FinTech’s Role in ESG Initiatives

As we peer into the future, FinTech is poised to play an increasingly significant role in Environmental, Social, and Governance (ESG) initiatives. There’s a growing focus on “FinTech for good,” especially in portfolio management and financial inclusion, which will enable major institutions to realize their sustainability objectives.

As the year 2025 approaches, businesses and professionals must adapt to these transformative trends, viewing change as an opportunity for growth in an ever-evolving business landscape.

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