Q1. Could you start by giving us a brief overview of your professional background, particularly focusing on your expertise in the industry?

I have 30 years of professional experience in the banking industry, primarily as a consultant for major global companies such as Accenture, NTT Data, and IBM Consulting. In this role, I had the opportunity to participate in and lead large innovation and transformation projects in different domains, e.g., Sales and Distribution, M&A, Marketing and CRM, Digital Banking, Payments, Cybersecurity, Cloud Transformation, Data, and AI.

I have worked in different geographies, primarily in Italy but also in most other European countries, such as Spain, Germany, Austria, and CEE.

In my professional journey I was also an Executive in a large Italian Bank leading its Marketing Intelligence Unit for 5 years.

Q2. What untapped opportunities exist for banks and fintech companies in digital banking, such as unexplored geographic markets or customer demographics?

If I must remark on one single area of opportunity that I believe has been addressed only to some extent by banks and fintech, I would point out the SME segment.

It is a relevant business space as, depending on geographies, it ranges from 15% to 25% of the overall Banking assets volumes; in addition, SME customers are less price sensitive. They concentrate a higher portion of their volumes with only 2-3 Banks and generate good profitability, even if counterbalanced by high capital absorption.

Opportunities in this segment rely on the possibility of offering a combined range of financial and non-financial value-added services in addition to traditional lending/payments products, such as extended open banking, access to alternative lending, accounting/fiscal services, e-commerce /marketing services.

These offerings are still very fragmented in the market and can successfully be bundled and distributed on a dedicated one-stop shop digital platform, built in collaboration between a Bank and Fintech, increasing the value per customer with new fee-based revenues while reducing the weight of the cost of capital.

Q3. What unique market segments can we target using AI and ML to enhance digital banking services, based on recent adoption rates and future growth projections?

I don’t see a unique business opportunity in the widespread adoption of AI and ML technologies; on the contrary, they have the potential to impact every business line and market segment in the FS industry.

The challenge is to overcome the initial maturity stage by creating an internal center of competence and removing the change management barriers. This will gradually identify opportunities and related solutions in the organization and scale the coverage of the existing business.

Q4. Which new market segments or international markets are neo-banks successfully tapping into that might offer expansion opportunities?

Neo-Banks typically have effectively addressed underbanked geo-markets and segments (e.g., young teens, unbanked population, or geographies with limited banking infrastructure); other niche businesses in the Banking industry can be attractive targets for neo-banks or fintech. These opportunities can be identified in micro-financing, alternative payment methods, and small-capital investment / saving products; all of them present customer needs that are not addressed by traditional banks and relatively low business volumes, which require digital native, agile, and cost-effective organizational models such as those of neo-banks to be profitable.

Q5. What is the projected market growth for DeFi over the next five years, and which sectors within financial services are poised to see the most significant transformations?

DeFi can no longer be considered a brand-new emerging technology and, despite research still projects double digits growth, there isn’t still a clear success case, and it could remain a niche business.

As an alternative ledger for traditional financial products, they are limited by the fact that banks' businesses are fundamentally ledgers, and efficiencies in their traditional businesses could be more easily and largely addressed by other technologies such as AI / genAI. Opportunities exist in businesses where by nature the collaboration of different players and multiple accounting is required such as trade finance, syndicated loans or project financing; in these cases, DeFi could be a better standard concerning current Bank’s practices but it must be addressed outside of traditional organizations and built referring to cross-border payment networks business models in which Banks are participants/investors and offering and end-to-end full outsourced platform for the processing of the transactions.

As an investment platform, DeFi can grow in the business of financial and non-financial asset tokenization by addressing the demand for fractional investments in large, unique assets (e.g., real estate or works of art) or extending the opportunities for small-capital investments in financial products.

As alternative currencies, there is still ambiguity in the market between crypto's inherent opaqueness, regulators' uncertainties in issuing CBDC, and the real demand for stablecoins to define a predictable scenario for investors and new ventures.

Q6. If you were an investor looking at companies within space, what critical question would you pose to their senior management?

In addition to the traditional questions that are relevant for every new venture, the DeFi space would require additional considerations such as:

• How many years has this technology/solution been ready-to-market?
• Have you analyzed why it is still not utilized or scaled?
• Have you analyzed the threats from alternative new technologies that can be a substitute for addressing your target market demand?
• Have you considered the possibility of a different go-to-market approach, leveraging on building a network ecosystem around the solution?