1. Banking and Banking Trends in Italy
Patrick Long

2. Presentation Overview
Origins of Banking
The Italian Economy
Italian vs. US & Banking Trends
UniCredit Case Study

3. Overview of Banking & Financial Services
Why Do Banks Exist?
Act as secure institutions of the storage of currency
Act as intermediaries for borrowers and loaners
Allow investors to earn interest on accounts

4. History of Banking in Italy
Established due to Crusades and the Silk Road between the 12th and 16th centuries.
Funds collected by banking families were used to fund the Renaissance.

5. History of Banking in Italy
Medici Family (founded in 1397).
The basis for many Italian city states rise to power (Venice, Sienna, Genoa).
Banca Monte dei Paschi di Sienna founded in 1472.

6. Italy’s Economy 7th Largest Economy (3rd Largest in Euro-Zone)
High, but improving unemployment rate
Low, but improving economic growth rate
High Debt to GDP Ratio 134%

7. Italy’s Economy

8. Italian GDP Growth Rate

9. Unemployment Rate

10. Top US vs Italian Banks

11. US vs. Italian Banking System Continued
United States
Italy
4,200 banks (down from 12,500 in )
52% of assets in top 3
604 banks (down from 760 in )
59% of assets in top 2

12. Developing Trends
Mergers and acquisitions reducing the number of banks.
Increased concentration at the top of the banking pyramid.
Outsourcing of key projects to Fintech startups
Reducing friction in the customer’s experience (using big data)
Continued Development of Mobile Apps for Online Banking
Disruptor Technology (Blockchain, AI)
New Regulatory Changes (PSD2)
NPLs

13. NPLs (Non-Performing Loans)
NPLs are loans that have been in default for 90 days and are unlikely to be paid.
Due to the prolonged recession NPLs have increased sharply in recent years.
Some financial analysts predict a financial crisis similar to Greece.
Collateral Recovering may lessen the burden (40%)

14. NPLs at Major Italy Banks

15. Non-Performing Loans

16. Revised Payment Service Directive
PS2D makes it possible for third party institutions to utilize banks information to offer financial services to consumers
Eg. Facebook can now use data collected by Bank of America to offer financial services individuals who keep their Bank of America accounts,

17. Case Example: Uni-Credit
Largest Italian Bank
Founded via a merger in 1998 of several large Italian Banks
18 countries, 8,500 markets, primarily in Western and Eastern Europe
NPLs (non-performing loans)

18. Joint Venture with Anthemis (EVO)
UniCredit Group and Anthemis Group partnered on a joint venture
“The aim of the partnership is to collaborate with emerging players within the FinTech ecosystem and explore, sustain and develop cutting- edge technologies and solutions to deliver next-generation experiences for our customers.”
Target Mid-Stage Startups in the Fin Tech Industry
Neptune Networks (Bond Connectivity Network) – databases for better bond trading

19. Hackathon (outsourcing projects)
Outsourcing creative projects to the “masses”
Used Appathons for developing software apps (2014, 2015, 2016)
Created a Hackathon to solve problems related to PSD2, revised payment services directive.
“External developers, representatives of Fintech Start-ups and Software Companies, future "out of the box" thinkers, together with employees of UniCredit”

20. Conclusion Origins of Banking The Italian Economy
Italian vs. US & Banking Trends
UniCredit Case Study

21. Sources https://data.oecd.org/unemp/unemployment-rate.htm
loans-severity-and-solutions
LSI.pdf?language_id=1
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