The Italian experience of Qonto told by Mariano Spalletti

In a conversation with Mariano Spalletti, Country Manager Italy of Qonto, we find out how this French fintech has managed to succeed in Italy and what the goals are after its first year of presence in the country.

After more than a year in Italy, what results have you achieved and what factors have led you to success?

Qonto was launched in Italy a year ago and in a year we have seen our customer base grow by an average of 25% each month, for a total transaction on our platform of over 300 million euros. Our turnover is also growing steadily and doubled in the first quarter of 2020 compared to the last quarter of 2019.

Our secret is, first and foremost, a customer-centric product: putting the customer at the center of the product. Its functionality from the creation and development phase is the key to understanding what to do and how to do it, to reduce the time and effort required to perform any operation and offer a unique user experience.
In addition to this, the focus on a very vertical market segment such as SMEs, which has always been under serviced by traditional banks, together with a truly tailor-made, modern, simple, transparent service that saves companies a lot of time every day, allows us to finally respond to needs that had never been listened to, but have already been present for years.

What “surprised” you about the Italian market?

Before the launch I was a bit sceptical about what the reaction of Italian SMEs to a digital banking service might be. I wasn’t sure if the market was ready and I was wondering how many companies could be willing to rely on a startup to manage their corporate finances with an innovative but 100% online account. There exists stereotype of Italian companies very much linked to the status quo and traditional processes and channels, especially if we talk about banking services.
I must admit that my doubts were unfounded and the answer was extremely positive from the outset. The Italian market is the fastest growing market for Qonto in Europe after the French market and we are growing significantly. I expect results to be still growing as we introduce specific features dedicated to Italian companies: the most important one so far has been the launch of the Italian IBAN, which has given a significant boost to our growth in Italy, also because it was the feature that was most in demand and that we were able to launch in record time, about eight months after the official launch.

What is the difference between the Italian market and the French market, in which Qonto has been operating for some time?

Qonto was born in France in mid 2017, while our international expansion began in mid-May 2019, when we decided to officially launch the service on the Italian market. During this year we got to know Italian companies better and better: both companies that were already Qonto customers and also potential customers, and we realized that there are actually several similarities between the French market and the Italian market.
The French and Italian SME market are in fact very similar, both in terms of size (about 4 million enterprises for both, although a little more numerous in Italy) and in terms of needs, given the inadequacy of the solutions offered by traditional banks, typically concentrated on two other market segments: private consumers and corporate customers.

What we guarantee with Qonto is a daily saving of time in the management of company finances and payments. With Qonto we guarantee the opening of the account in minutes and 100% online, to make simple and fluid corporate payments, both your own and those of your employees, canceling expense reports and simplifying accounting, all this with a UX and customer service of the highest level.
So I do not see any significant differences in terms of customers and their needs, but rather in terms of territorial dynamics and, in a sense, local bureaucracy. To give an example, we can think about the payment of taxes: in France a simple direct debit to your account via SDD (SEPA circuit debit) is enough. In Italy – as we know – you need to pay through the F24 form, a clearly specific service that exists only in our market and which is actually quite cumbersome. It is aspects such as these that actually involve extra investment to offer an identical service in the markets in which we are present. However, I think it is normal that each country has its own peculiarities, and we are in fact working to push localization to the maximum and offer the same level of service in all the markets where we are present.

How did you deal with the health emergency as a company?

The health emergency has been a challenging period for SMEs, startups and all in all also for us, as despite the strong international expansion they are still investing heavily to become profitable.
I have to say,however, that we were favored by two factors, namely: a solid business model, with revenues that are not based solely on the use of certain features (e.g. interchange on card usage) but also on fixed monthly fees; an important availability of resources, thanks to the Round C of 104M closed in January. These two factors have allowed us to face this period with serenity and not only to focus on the continuity of our service, but also to put in place some initiatives to help our customers on an economic level: we have in fact offered to all our customers from the end of March to the end of May, the virtual Qonto cards for free, even those not included in the plan and we have extended the free period from one to two months for all new customers who opened a Qonto account in the same period. In fact, the “bimonthly covid” was a moment of growth for Qonto and in Italy, in March and April, we acquired 55% more customers than during the first two months of the year.

What has this lockdown period taught you personally?

The main lesson of this period I believe, however, is related to the way companies must communicate. Although this was a trend already underway, there has been even more emphasis on the need to approach and dialogue together with one’s target market and prospects having less commercial nuances, placing even more emphasis on valuable and “inclusive” content, going from talking to a “client” to talking to one’s “community”.

We have strongly believed in the importance of helping Italian SMEs and professionals in this period of crisis, not only healthwise but also economic. For this reason we have tried not only to communicate the special offers we have put in place, but, with a broader perspective, we have tried to convey and highlight all the communications that we felt were important and useful for Italian companies to overcome the crisis, such as, for example, through the reworking and simplification of the measures of the various decrees gradually issued (“Cura Italia”, “Liquidita” and “Rilancio”) in an article to be found in our dedicated blog or by organizing or participating in webinars in order to share tips and suggestions to better face the crisis and organize for the restart.
We want to establish a special relationship with our customers: we are not just a simple “supplier” of services but a real business partner. Relevant communication is the basis for trust, the fundamental element for a valuable and sustainable relationship.

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N26 launches the new Italian IBAN, how does the strategy change?

How does N26’s business change in Italy now that all accounts opened in this country will automatically have an Italian IBAN? How is N26’s business changing now that the whole world is dealing with a pandemic? Andrea Isola, General Manager of N26, illustrates the situation of N26 in our country and what scenario he imagines for the post COVID19 fintech.

What were the key stages of the route to get to an Italian IBAN? With what time lengths and difficulties?

It was a path that required several months of work by the entire Italian team and a part of the global team – involving over 100 resources split among the different groups: product, marketing, operations, banking, customer support, and so on. It’s a novelty that was carried out precisely because we had intercepted this request coming from our community. The last two months have certainly been challenging, especially due to the global health emergency, but we have achieved a great result, a real milestone that will allow us to make N26 a solution is ever closer to the needs of our customers who will be able to use our products as primary accounts in all respects.

What are the characteristics of the Italian market? Who are your users and which are the services most appreciated?

Our customer base is very diversified: if we consider age, 55% of users are under 40 years old, 45% are over 40. It may seem strange that there are also older people among the customers of a fully mobile bank, but this shows how much more and more people – regardless of age – actually appreciate a new and fully digital bank model. The most popular features are certainly transparency, security and distinctive UX. We were first “born mobile” and therefore all our services closely linked to digital are also fully appreciated. We give clients the opportunity to open an account in just a few minutes with a fully online, paperless digital onboarding experience without the need to go to a branch. All of these features are particularly appreciated, however, in this period of lockdown when so many people are finding themselves forced into their homes, but cannot do without banking services.
In addition, we are continuously developing innovative services such as Spaces, which allow you to create virtual piggy banks, where you can save your money (also with a view to future goals, considering the period), or Rules, which allows you to set up money management rules for recurring payments or frequent expenses. At the same time, premium customers can also share money with other people thanks to Shared Spaces: virtual shared accounts for shared expenses between friends, family, couples, to name a few.

In the light of this innovation (IBAN), and Covid19 what objectives do you have for 2020 in Italy?

We want to continue to invest in the Italian market to acquire new customers, develop new products/services and forge local partnerships that are strategic for us and for users. The current health crisis is also proving to be an important driver in pushing the digitalization of the country and changing consumption habits. We expect the trend of digital payments and online shopping to continue to grow significantly, even in older age groups, as we are already seeing take placs. As a banking player, we want to support our customers in this process of technological acceleration.

In general what post-Covid-19 scenario do you imagine in finance and in particular in fintech?

Companies like ours, born with a mobile and digital soul, will certainly be one step ahead in what promises to be a total revolution in habits and ways of contacting customers. We are already talking about a “new normality” that will affect all sectors and we absolutely cannot imagine the banking sector will be excluded. Even more traditional financial realities will necessarily have to adapt to these new scenarios and we expect that many of them will be able to rely on fintech companies to speed up processes, instead of opting for the development of in-house solutions that would require much more time and resources.

How has N26 put in place special initiatives to address those who are suffering the most from the economic effects of the pandemic?

To help those who may be isolated at home or in areas with postal restrictions due to the Covid-19 pandemic, we have launched a new feature, instant issuing, which allows customers to use the account via apps and without the need to wait for the physical card to arrive. Simply open a new account, which takes about 8 minutes, and after the first recharge you can use your digital card right away. To provide additional support we have kept our Support Center active 7 days a week to be able to respond quickly to any doubts of our customers. At the same time we have also launched a fundraiser within our community, inviting customers to make a donation in favour of Gruppo San Donato.

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