Issue link: http://endeavor.uberflip.com/i/1202586
14 While consumer protection and regulatory measures known as "Know Your Customer" and anti -money laundering measures are a common constraint on fintech companies all around the world, Italian companies have to navigate a particularly complicated supervisory landscape. This complexity results partly from the combination of national legislation and EU-mandated directives that need to be interpreted and applied. This is the case across all 28 EU member states, but it may impact the Italian fintech ecosystem even more severely. The fintech regulatory framework in Italy does not separate new players from established institutional ones. As a result, Italian companies operate in a general atmosphere of uncertainty which translates into high operational costs. The conspicuous absence of legislation means that fintech players fall within the jurisdiction of several existing financial services regulatory bodies such as the European Securities and Markets Authority, Bank of Italy and Consob, and this translates into high compliance costs for fintech companies. More than a safety measure, these costs are inevitable to obtain and maintain the authorization from regulators. As soon as a directive on payments or lending is adopted in the EU, the Italian Central Bank needs to get to work to translate it into Italian legislation, and communicate the coming changes. When a new European directive is adopted, Italian legislators need time to ratify it. This causes an atmosphere of uncertainty where Italian fintech companies sometimes spend months developing technology that may not comply with the coming legislation. Companies need to retain large compliance teams because Banca d'Italia needs to authorize the organization structure for companies in the financial services and that needs to involve a compliance team. One founder reported that in his first year of operations, there were three compliance officers on his 17-people team. 18 CHALLENGE 3 REGULATION 30 20 10 0.0 50 60 70 40 Regulation Access to Capital Access to Technical Access to Managers Access to Talent Access to Customers THE HIGHEST RATED CHALLENGES OF FINTECH FOUNDERS IN MILAN BY BUSINESS MODEL TYPE Percent of respondents who rated the following issues as a "severe" or "very severe" challenge. B2C. N =18 B2B2C. N =15 B2B. N = 28 Source: Endeavor Insight. Sample size = 64 responses by Milan fintech founders.