More SaaS in Italian banks, but not enough RegTech… for now! Here's the the CIPA-ABI 2022 report

Here is the banking sector of the future: increasingly digital and technological, even in internal processes

About a year ago we published our post on the CIPA-ABI 2021 report, and now here we are again commenting on the document published a few months ago by CIPA (Interbank Convention for Automation) and ABI (Italian Banking Association). The "Survey on IT in the Italian banking sector" is in fact a report designed to take a snapshot of the situation regarding digital transformation in the Italian banking sector, with a reference to the strategic objectives pursued, the processes most impacted, the technologies most used and, in general, the organizational and technological state of the art of Italian banks. The CIPA-ABI 2022 report examines the responses received to 34 questions from Italian banking groups and banks related to the year 2021 and the near future of financial institutions, in order to assess the state of the digital transformation process in the banking context and outline the next evolutions, starting in 2023 and in the years to follow.

The CIPA-ABI 2022 report: a focus on new methodologies and technologies for banking operations

Going deeper into the survey conducted by the Italian Banking Association, it is first worth clarifying - at least at a very general level - the way the survey was conducted and how it was carried out. ABI examined for its survey a sample consisting of 20 banking groups - covering 93% of total banking sector assets - and 4 individual banks, focusing its study on two macro areas of inquiry:

• the strategic objectives considered most relevant in the banks' digital transformation journey (in particular, strengthening cyber security, improving the digital customer experience, modernizing IT systems and architectures, revising business models from a digital perspective, technology and security profiles, and analyzing IT choices regarding innovative methodologies, tools and technologies;
• the business organizational aspects related to digital transformation, namely the revision and updating interventions initiated by banks in the IT field, as well as the adaptation of development methodologies.

Thus, it is evident how the Survey on IT in the Italian Banking Sector curated by CIPA and ABI provides an up-to-date overview of the use of Information and Communication Technology (ICT) within the Italian banking context, with a specific focus on IT choices regarding innovative methodologies and technologies to support banking operations and processes.

SaaS solutions are growing in banking trends, while RegTech is slower... at least for now

But let's finally get to the content of the CIPA-ABI report to identify what the most relevant data are, especially with reference to our area of interest, namely that related to Regulatory Technology and, more generally, to the whole sphere of digitization of internal processes, thus the sphere that concerns compliance and risk management activities within financial institutions. First of all, it should be noted how the trend to use cloud services is increasingly established in the banking context. Suffice it to say that 58% of responding banks were already using cloud services in 2021, while 29% had already started a process of migration in this direction. In particular, the most popular model - used in 70% of the cases of cloud service usage - and most growing is Software-as-a-Service model, which involves using applications through cloud service providers that control the delivery infrastructure. Exactly what is happening with our SaaS designed for the RegTech market, Daitomic. According to the CIPA and ABI report, "in the long run, further growth is expected, especially in the level of SaaS adoption". So the provision of Software-as-a-Service is proving to be a favorite among financial institutions and, according to the survey, will continue to grow. The other side of the coin, however, remains the one highlighted a year ago, namely the low interest shown by Italian banks in the solutions offered by Regulatory Technology. In this sense, the whole area of Governance - thus also the banking compliance sector - is confirmed to be one step behind the use of new technologies focused on customer user experience, cyber security, remote work efficiency - stimulated of course by the Covid-19 pandemic -, collection and payment management, and so on. Currently, RegTech solutions are not yet high on the list of interests of Italian financial institutions, but this trend is bound to change. Indeed, looking at the US and UK markets, but also at the guidelines dictated by European authorities, Regulatory Technology will increasingly play a leading role in the financial environment, both in terms of traditional banks and the new realities represented by FinTech and Crypto companies, which will have to make up for ever-increasing regulation in the coming months and years. And we at Aptus.AI, thanks to Daitomic, are already ready and prepared to play a leading role in establishing a RegTech-based approach in Italy - and in Europe.

A bottom-up approach in banking digitization: the work of Aptus.AI with the Regulators

At Aptus.AI we realized in advance the urgency within the banking compliance sector to keep up with the digitization that is sweeping the entire financial sector - and the world, more generally. This has allowed us to be real pioneers thanks to our machine readable banking regulations, which in fact were also selected by the Bank of Italy as part of the first Call for Proposals of the Fintech Milano Hub. And it is precisely the Deputy General Director of the Bank of Italy, Alessandra Perrazzelli, who certifies how a reality like ours in Aptus.AI can and should contribute to the digitization of the banking sector, not only on a commercial level, but also as an ally of the banking institutions themselves. “[The first Call for Proposals] for the Bank of Italy was an extraordinary opportunity to start an important dialogue with operators on many aspects and to become aware that the regulatory approach, particularly in a scenario where the evolution of technology pushes the offer of new services faster and faster, can be formed not only top-down but also bottom-up”. All the more so in areas, such as compliance, where innovation is as necessary as it is slowing down, despite the fact that there is ample room for technological growth. Taking the words of BankIT's Deputy General Director, a revolution in financial compliance can also come from a bottom-up approach, that is, through innovations, such as our machine readable banking regulations, and to SaaS solutions for the RegTech market, such as Daitomic. Contact us to learn more!