October is active in five European countries and now it’s the turn of the CEO of October Italy: Sergio Zocchi.
In our serie Meeting the CEO’s of October we talk to all CEOs of these countries:
how did they end up at October, how does the funding landscape differ from the other October countries and what are their challenges?
Previously we spoke to Luuc Mannaerts, CEO of October Netherlands, , CEO of October Germany and , who leads October in Spain.
Read or watch the interview below!
What did you study and where did you work before joining October?
I graduated in Electronic Engineering at the Polytechnic of Turin and obtained a Master in Corporate Finance and Investment Banking.
Then, I started my professional career in France in the R&D department of a multinational semiconductor company.
During the following 10 years, I worked as entrepreneur in the technology sector.
My interest in technology and innovation led me to diversify my activities and I started to systematically invest in innovative companies.
First with the launch of an Italian Venture Capital fund that was specialized in the ICT sector.
The interest in the fintech sector developed during my time as a Venture Capital partner and led me to my current role as CEO of October Italy in 2016.
What are the challenges and opportunities in the Italian financial market?
Some challenges are specific to October, while other challenges apply to the entire Italian economy. SMEs are the leading businesses in our country.
There are about 200,000 of SMEs in Italy, which is less than 5% of the total number of active companies, while 95% is represented by micro-enterprises.
These SMEs contribute to over 41% of the entire turnover generated and 38% of national GDP.
SMEs in Italy are embarking on a path of digital transformation.
The European Commission has measured that the level of digitalization of Italian SMEs is below the European average.
Despite this gap with the rest of Europe, the situation due to Covid-19 has certainly shuffled the cards.
This is because during the crisis, going digital was the only way for SMEs that could guarantee a certain continuity of business.
This has encouraged the acceleration of digital transformation and has made SMEs also turn to online players, that offer a fast response and high level of service.
And so the market for alternative financing has been growing. According to ItaliaFintech, in 2020 funding granted to businesses by alternative finance was €1.7 billion, more than four times than in 2019.
In the first quarter of 2021, fintech financing granted almost tripled compared to the same period last year.
This has led to collaborations among fintech and between fintech and traditional players, which was already booming in 2020 and is continuing into 2021.
It is no coincidence that the number of partnerships has increased significantly in recent months.
More and more banks, institutions and trade associations are interested in FinTech companies.
This is because, to improve customer centricity, banks need technological solutions developed by specialized operators.
FinTechs can help financial institutions thanks to their speed and focus on specific segments of businesses.
How can October contribute to this change in Italy?
Our contribution has not just been in terms of direct funding. It also is also about the solutions we offer to other financial institutions in the market.
October owns skills such as speed, digitalization, flexibility and user experience focus. These skills are essential for both traditional financial institutions and large industrial companies.
From a banking point of view, the best way forward is working on all financing processes, making them more streamlined and reliable.
So banks and FinTech have a shared goal of improving the quality of services offered to customers.
That is why October has launched October Connect, a SaaS neolending technology for financial institutions.
October’s tech platform is the key solution, because it is ready-to-use and can be deployed end-to-end or in its modular solution as SaaS.
Even in the traditional version of October we play a fundamental role, contributing to the creation of a post-pandemic model as an aggregator of many institutional, public and private actors working together to support SMEs and the real economy.
The challenge is complex, because three key aspects are involved in this transition:
- First of all it is a technological legacy,
- second it is the growing demands for an optimal user experience from customers.
Finally, it is the regulatory framework, which will soon be updated with the new European Crowdfundig regulation.
What are October Italia’s objectives for 2021?
First, keep on working to create a culture around direct lending and on October’s brand reputation in the Italian market.
There are two elements that clearly distinguish October:
- the first element is our European DNA. This allows us to convey European resources to Italian SMEs.
- The second element is our technological approach, well represented by October Connect.
Another objective is to keep contributing to the company’s overall objectives with significant and growing numbers in line with market demand trends.
Nowadays, Fintech is vital for the market.
October addresses the direct demand through its lending platform and the indirect demand acting as an aggregator between institutional investors, private lenders, business partners and financial institutions.
What do you think is unique of October?
The first thing that comes to mind is that October is about being fast and able to adapt very quickly to the ever-changing needs of the market.
October aligns the many technological developments with the increasing needs of SMEs, our partners and our private lenders community.
October is at the hub and helps to connect all participants.
Since the early stages of the coronacrisis, we launched multiple initiatives and demonstrated our agility and innovative drive.
Besides October Connect, we developed and launched an instant lending offer based on a new risk scoring model.
Also we developed a new credit risk scoring model, named Kea, based on bank transactions.
What October value do you most identify with?
October’s values are all very meaningful to me, but “always improve” is the perfect reflection of the mindset we approach new challenges with.
We take up new opportunities working together to achieve our goals and aiming to improve while enjoying the journey.
We count on a strong team with a great appetite for excellence and support for one another.
What has been a memorable funding project for you?
I have to admit my most memorable October project was the very first one we took on.
The project took place in 2017 and involved a small business, which was thriving to grow.
A few years later, in 2021, we were glad to support the same client during the Covid-19 crisis.