The decision over when to apply for a banking licence is a tricky one for challenger banks.
It is a trade-off: a banking licence denotes respectability and, crucially, allows the bank to take deposits; conversely, a licence comes with regulatory oversight and strict capital requirements, potentially curbing growth.
Marzio Pividori, the CEO of Italian business bank Banca AideXa, is in no doubt about the best strategy, the bank having garnered a European banking licence in 2021, a year after the fintech was born.
Banking licence
A banking licence, the CEO, dressed in a crisp white shirt, fashionable glasses and holding notes, opines, is a “must. If not a must, it’s definitely a plus".
He cites the benefit of having stable deposits in a credit market.
In a jibe at rivals, he continues:
“We have seen that of all the fintechs that started doing credit in Italy, AideXa is one of the few, which is still, let’s just say, present.
“One of the secrets was that the founders decided to start from the very beginning with a banking licence.
“As you can imagine doing the fintech job, having a banking licence is a little bit harder at the beginning because, let’s just say, it implies strong regulation and active interaction with the regulators. But at the end it pays off.”
Recent recruit
Pividori, an erstwhile Deutsche Bank executive and consultant, now in his early 50s, only joined Banca AideXa at the start of 2024, swayed, he says, by its proven business model and a fondness for its shareholders.
In a nutshell (a phrase which Pividori favours)) the Milan-based Banca AideXa provides loans and business bank accounts for micro and small businesses in Italy, a bit like Allica Bank in the UK.
Pividori says:
“In a nutshell, I think that when you address micro and small businesses here in Italy, and overall in Europe I would say, if you can combine a specialised approach with technology you can do very good things.”
The idea behind Banca AideXa came about during Covid, amid lockdown, as two of its co-founders Roberto Nicastro (the bank’s chairman), and Federico Sforza, discussed the future of finance over coffee.
Big bet
Banca AideXa’s big bet is that entrepreneurs hate spending hours waiting in a bank branch to ask for a loan or waiting weeks before the loan is credited.
The branchless fintech has spotted a gap in the market, targeting a demographic that the big banks are not serving.
It has also bet big on tech and open banking, so, for instance, during the Banca AideXa’s loan process, businesses can authorise the bank to access their current account information, helping them process loans quicker.
Its product suite is pretty simple: namely fast-paced loans up to €300,000 and state-backed loans of up to €3m along with several business accounts.
The simplicity of its product offering echoes its uncluttered foundations.
Pividori says:
“We were lucky because the founders decided to start the bank from scratch.
“In some cases when you start a bank acquiring or buying other banks and then reconverting them you can have differences in terms of legacies and backgrounds.
“Here we have the privilege of building everything from zero.”
Funding
The fintech has an uncommonly large number of co-founders, 10, including one female co-founder, most of whom, like a traditional close-knit Italian family, are heavily involved in the business day to day.
It has hitherto raised €96 million in total, including a 2020 €48m raise, the largest financing for an Italian fintech startup.
Backers include VC 360 Capital Partners, high net-worth investors and business angels.
Banca AideXa is not a big beast, but it’s growing and, moreover, the small and micro business sector is bountiful, the backbone of the Italian economy with four million businesses.
Revenues up
Banca AideXa recorded revenues topping €29 million in 2024, compared to €12 million in 2023, with a total portfolio of €634 million in outstanding loans at the end of 2024.
It has over 20,000 active customers but currently has just 1.5 per cent market share of guaranteed loans.
Pividori is not immune to the occasional bon mot (“I am an only child. So, I am always asking to be with others”), and likes bigging up his 110-strong staff, planned to grow to 130 this year.
Four of the bank’s staff, the father of two points out, have PHDs in Maths while the average age is 33.
His management style, he says, is team-centric, saying he’s a “glass half full” manager, who will push colleagues when he senses an opportunity.
Hitting profit and future
Pividori says one of the bank’s big achievements under his tenure is hitting a profit at the end of 2024, with full-year profitability on the cards for 2025.
However, there are challenges ahead for the bank and its rivals as state guarantees for businesses are decreasing, despite an economic credit crunch.
That said, 2025 is already looking busy: an office move and a new credit scoring feature are to come while growing its broker network and inking in partnerships with banks are also on the agenda.
It is also targeting €45 revenues for 2025 and the CEO says a goal is to snatch four per cent of the guaranteed loans market in five years.
The CEO says:
“With our financial innovations and constant technological support, our goal is to assist an increasing number of these companies, which currently represent 30 per cent of GDP and approximately half of all jobs.”
Pividori might be busy with the day job, but weekends are downtime, spent with the family, in the Alps or playing a bit of padel.
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