Innovative companies, fintech banks lend more and better

Banks that invest in fintech projects for customer evaluation grant innovative companies that are already their customers more loans and at lower rates than other intermediaries. Investments in fintech are associated with more durable credit relationships and do not lead to significant changes in the probability of credit quality deterioration.

These are the conclusions reached by a study, entitled 'Chi si somiglia si piglia: l'affinità elettiva tra banche e imprese innovative', published by the Bank of Italy.

Banks, the study notes, can invest in fintech projects to improve their ability to assess the creditworthiness of customers. The paper investigates the effect of these investments on the provision of credit to companies, particularly for younger and innovative ones.
The analysis is based on data from the Centrale dei Rischi and information on banks' financial innovation from the Regional Bank Credit Survey. Innovative companies are identified on the basis of the special section of the Business Register introduced by the Start-up Act of 2012.

Investments in innovative technologies in the two-year period 2023-2024 made by banks and non-banking intermediaries amounted to approximately EUR 1 billion; a similar amount is estimated for the following two-year period, for an increase of 1.4 per cent. These are the findings of the Fintech Survey on the Italian financial system (5th edition) released before Christmas by the Bank of Italy. Spending,' it adds, 'is highly concentrated among a few intermediaries and, in line with previous editions of the survey, banks are the main investors in innovative technologies.

Payments, credit intermediation and operational activities remain central (88.5% of the total); the weight of the payments area decreased significantly in favour of operational activities.