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January 29, 2014updated 04 Apr 2017 4:09pm

Fineco: the bank of the future?

FinecoBank is an Italian and international reality. From brokerage start-up to online bank, it has a record of innovation and is becoming an example of modernity. In December 2013 it was again voted best website of the year. Valentina Romeo interviews Fineco's Paolo Di Grazia, head of the Direct Bank

By Verdict Staff

FinecoBank is an Italian and international reality. From brokerage start-up to online bank, it has a record of innovation and is becoming an example of modernity. In December 2013 it was again voted best website of the year. Valentina Romeo interviews Fineco’s Paolo Di Grazia, head of the Direct Bank

Fineco is the largest online brokerage firm in Italy holding over 880,000 customer accounts. Part of UniCredit group since 2007, it has not only established itself as a fully integrated multimarket platform, but it has also set a definite course into the online and mobile banking world.

"Across the Italian and European scenario, FinecoBank is first of all a new bank, because we only started 10 years ago. On the other hand, the title tells you we are new from other points of view, and it is not just a claim. It is a total new way of running the bank and the investment services," Paolo Di Grazia, head of the Direct Bank, FinecoBank tells RBI.

He continues: "We are the first direct bank in Italy, launched in December 1998 as a brokerage-only service. Since 2000, we have officially transformed into a bank adding a lot of brand new services and products."

Fineco was the first bank in Italy to issue a high interest deposit account, which then quickly became a full current account. Di Grazia explains: "FinecoBank is the only bank in Europe to offer a completely integrated model and all in one single account, and allows you to use the digital online platforms for anything that is transactional.

"This goes from banking operations to credit cards, stock purchases, cheques and bill payments. Of course, you can do this via both the online and mobile channels."

In its three-stage business development, the bank has also integrated an online network of 2,400 personal financial advisors, and, again, it was the first bank in the country to offer such a dedicated service.

Di Grazia says: "The bank gives the possibility to buy and invest in the best available funds and investment houses worldwide, so it has a really open model."

By now, there are around 60 different investment houses available in FinecoBank and also thousands of funds to invest in. "With such an open business model, having someone to guide you through this enormous offering was simply fundamental, "Di Grazia says.

Dominating through uniqueness

"Fineco is a direct bank and this is its uniqueness, because it takes the best from online banks- its big operational efficiency and practicality- and, on the other hand, it is still close to the client as the traditional banking model. But that has improved. Clients used to go to branches, but now financial advisors go directly to clients and it is a unique model in Europe," Di Grazia says.

Over the past year, the bank has opened another 80 new Fineco centres across the largest cities in Italy. These centres are specialised in financial planning and represent the only physical contact with clients.

Fineco, in fact, doesn’t have local branches or ATMs, but utilises UniCredit’s branches for cash and check deposit and withdrawing.

As in many medium and large scale enterprises such as Fineco (it has over €42bn total assets, as of September 2013), data mining and business intelligence also represent an important concept for the bank.

Aiming to understand consumers’ habits and needs, Fineco has recently developed a new service platform applied to its current accounts.

With this tool called Moneymap, everything customers do with their current accounts is represented in a digital map, which keeps all their purchases strictly under control.

"Everything you do is automatically registered through an algorithm so it can recognise the type of purchase you have undertaken, and it classifies it in the correct category box. It could be taxes, bills or other expenses dealing with the current account and card and then it is mapped and classified," Di Grazia says.

He adds: "The second and most relevant aspect is that this mapping service also automatically proposes some provisional budgets to clients. It is an intelligent service because it studies purchase behaviours and proposes budgets for the following months and year."

However intelligent and technology advanced, Di Grazia says MoneyMap is just the beginning of a new series of innovations within the group.

According to him, among its numerous products and services, Fineco is the only bank in Italy- and one of a small number in Europe- to offer a multi-currency service for its accounts.

"The multi-currency service platform is not only used to invest in a specific currency (UK Pound Sterling, Euros, US dollars and Swiss francs) but also to make payments. If I want to transfer some money in GBP or US dollars I can easily do it and in the real- time foreign exchange," he says.

"If there is something similar to this service outside Italy, I am sure it is not this versatile," Di Grazia says proudly.

App, mobile and social media

Fineco gives a lot of attention to the mobile channel especially because it is evolving really fast. The bank has just activated its apps for Windows 8 mobile phones, after also enabling Apple iOS and Android systems. "The interface design and the usability of all our digital channels are a must for us, we are manic about it," Di Grazia says.

However, the favourite channel for Fineco’s clients is always the website. Despite this, more than 20% of the daily access to the bank is via mobile, with also a surprising 40% of users being women. "Up until three years ago, mobile access was close to 1%.

As smartphone sales in Italy are to surpass PCs and laptops, it won’t take too long for mobile banking access to beat online," he adds.

If Fineco aims at mastering the mobile and online offer, it is clear its social media strategy has a distinctive trait as well. The bank is active on all the main social networks (Facebook, Twitter, LinkedIn, Google + and Pinterest) with Twitter currently being the most engaging tool; Fineco has more than 6,000 followers, the largest number in the whole Italian banking sector.

However, Fineco does not look for big volumes in terms of number of followers, as its social media strategy is based on efficiency and quality of the content.

"We decided to let users be free to share their comments on our social media channels. On Facebook we offer some discussion topics and anyone is free to share opinions. We don’t campaign to reach a target of "likes". Who likes our page and discussions is definitely someone who loves the bank. Our followers are authentic," Di Grazia says.

Reaching the ideal model

Many Internet banks in Europe struggle to evolve, especially because they compete on prices, offering very high interest rates and everything at zero coss. According to Di Grazia, this business model approach is not sustainable anymore. "’Pure’ online banks in Italy and Europe have a difficult journey ahead, and therefore they need to evolve in some way.

"Fineco evolved from an online-only bank to a direct bank offering all those value-added services that clients are willing to pay," Di Grazia says. "Nowadays, our competitors are not online banks, but traditional banks. Still, 90% of Italians’ savings are in traditional banks. Most of our clients come from there. However, I really don’t see any other players in Europe with the same business model as ours."

Fineco is not only an Italian product though. Similar to it, but lacking of its financial advisors’ network, is German DAB (Direkt Anlage Bank), another online direct bank part of UniCredit. Di Grazia says the focus will remain the Italian, German, and Austrian markets, where there’s a massive growth potential and still a lot of work to do.

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