Utego, one of over 150 fintechs in the Fintech District community, has become the first non-banking Italian AISP (Account Information Service Providers). We asked CEO and Co-Founder Stefano Musso how this important milestone has been achieved and how they intend to progress in the market now.
Which was the path that led Utego to become the first non-banking Italian AISP?
The idea of proposing a financial aggregator to the market was born on an evening in the spring of 2018: wine, scattered reflections and professionals – active in the banking sector – eager to ride their own vision, after years of corporate projects often successfully implemented, sometimes nipped in the bud.
Since that evening the idea grew: we immediately realized that developing it in a bank would make no sense for the end users. According to our vision who would, in fact, want to aggregate all their accounts in a bank thus making visible all their financial assets?
We remember we had a meeting with you at Fintech District to get an opinion about our idea. Your feedback was “Beautiful idea but to develop a fintech on your own in Italy means blood, sweat and tears!
It was a great challenge and we worked on it 24 hours a day, on weekends and holidays and meanwhile our professional lives were taking a new direction: from the development of additional features in addition to the financial aggregator, business plan, pitch with investors, up to the most important step: giving up our fixed position to get serious. The interest for our application was growing day by day and in fact this is how Utego was born.
This happened at a particular time for Italian finance when it was certainly clear that it had to adapt to the requirements of the most recent European and national regulations, such as the one regulating AISP, but in which the banks were still afraid of a possible entry in the sector of third parties proposing new services
The path from then until today is almost a cliché. Technological development, organic growth, partnerships, beta apps available in the app stores, some important acknowledgements from the market, many “no, thanks” or “yes, however”, but also a lot of confidence in our vision, all very clear to us. So clear that in 2019 we rejected a six-figure investment proposal from a bank in exchange for equity. As you say, that “…non-bank” is important to us; we consider independence from credit institutions in offering the aggregation service, an important competitive advantage. More than technological innovation, innovation of corporate identity was important to us.
What were the biggest difficulties and what/who helped you?
The most difficult challenge was to comply with the regulator’s requests in obtaining authorisation to operate the account information service referred to in Article 1, paragraph 2, letter h-septies. 1), n. 8, of the Consolidated Banking Law (i.e. to be AISP).
Our governance structure today is that of a credit institution and of a “mythological” new-co created by a couple of guys in a garage, while inheriting from the latter formula the speed of execution and flexibility of change: Shareholders’ Meeting, Board of Directors, Advisory Board, Board of Statutory Auditors and Independent Auditor, Sole Control Function for Audit, AML, Risk and Compliance. We also had to implement the layers of adequate verification of our users and anti-money laundering controls, while not managing money and not giving any , for the time being, nor making available any possibility for our users to make dispositive transactions on their accounts, from our application. Certainly in this path the confrontation with trade associations and dialogues with institutions can help; in the Advisory Board of Utego there is also “A.P.S.P.”. (Association of Payment Service Providers), that is very active in this context.
However, it is essential with these issues to have a strong legal and compliance solidity on both the legal and compliance fronts, both by structuring internal competence centres and by making use of external, authoritative professionals with years of experience in the market.
On the internal front, Utego now has a Legal, AML and Privacy function, while externally it makes use of the services of the law firm “Atrigna & Partners” which assisted us in the administrative procedure for the issue of the Bank of Italy’s authorization to operate AISP and the firm “LaScala – Società tra Avvocati” which will follow after the development of our company as FUC
What changes in your business after this achievement?
I’d say basically nothing. Almost at least. We always remember that although our app is already downloadable from app stores in beta version, it has yet to be officially launched on the market with the functionality for which it was born, that is financial aggregation. It will be able to do so from September, right after the goal just reached, so to this regard I would speak of “enabling success”, rather than goal. On the contrary, for us the authorization to operate as AISP is only the starting point!
What is changing is due to the strong barriers of entry we had to overcome. This has intensified the prospects of B2B business, accelerating contacts with third parties who ask for the Utego aggregator in white label, and with those who offer us payment services to provide an added value to our end users. However, these are already pipe-line business developments in our business plan and we are carefully evaluating all possible scenarios.
What is your next goal, say for the end of 2020?
I can tell you two of them: to officially launch the app, complete with financial aggregation functionality, and exceed 20 thousand users.
How did you experience the lockdown as a company: what was the impact on your business and how did you react?
As a company our experience went well. Working from your PC, wherever you are, even at the bar or on a beach, is not a point of attention for us, but the satisfaction of those who work is; here the “place” can make the difference and we are aware of this. Today the “place” of work can finally be indifferent in importance, even in Italy with the new enabling technologies; just developing a culture of responsibility and always keeping an eye on the result. Of course, there are three areas of attention that we must know how to govern well: the first is human relations, which remain fundamental and will perhaps need to be reinterpreted in the future, with respect to how we live it these today, both personally and in the HR cultures of our companies.
The second is a sustainable balance between professional and private life. If the culture of responsibility and result orientation are too strong, it may be easy to balance the latter in favour of the former and this does not bring wellbeing.
The third is the maintenance and strengthening of a strong corporate identity that is built every day also through the casual exchange of ideas and opinions, which can only happen in a context of shared physical location. As for the impact of the lockdown on our business, if the Regulator hadn’t closed the offices in charge of receiving applications for two months, we might have been able to launch the app before the summer. However, it was a good time for dialoguing with financial and insurance partners in general.
Utego, in addition to the aggregator, also offers users a marketplace where they can find and choose the product best suited to their needs. This showcase must, however, be populated with financial products supplied by third parties. During the lockdown we fixed partnerships with Revolut, N26, Qonto, Penta (now on standby on the Italian market) and Gimme5 to have their products found in our Showcase.
Other Italian banks are on the list, but I cannot reveal their names yet.
Moreover, Utego also has a Financial Education feature, which during the lockdown was enriched with an “Investment focus”, populated with Gimme5 contents and an “Insurance focus”, with Axieme contents.
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