Smartika, the first Italian operator in P2P lending, keeps innovating

Smartika was the first Italian operator in P2P lending and has been innovating since 2012. We asked CEO Rosy Alaia to tell us the latest news.

What does Smartika do and who does it address?

Smartika is a Payment Institution regulated and supervised by the Bank of Italy. We are therefore a financial operator authorized to provide payment services to Lenders and Applicants. Founded in 2012, it operates in crowdfunding lending. Smartika was the first operator in Italy in P2P lending. After the entry into force of the implementing decree of the European Directive 2007/64 (Payment Service Directive), the Bank of Italy has more precisely defined the regulatory framework within which P2P lending platforms can operate in the form of Payment Institutions. In fact, the activity of the platform manager is authorized if it can be classified as the provision of payment services while, from the point of view of the borrower of funds, the collection of funds is authorized when applicants and providers can affect the contractual clauses in a personalized negotiation. The users of the Smartika platform in particular are exclusively private entities. Since 2018 Smartika is a company subject to the management and coordination of Banca Sella Holding S.p.A.

A few issues on Smartika that describe your business and target for the end of 2020

There are currently more than 5,800 active lenders on the Smartika platform and since 2008 more than 5,700 loans have been disbursed for a total of approximately 31 million EUR. We aim to reach a total disbursement of EUR 32 million by 2020. A boost to the P2P lending market among private individuals was given by the 2018 Budget Law, which introduced the final withholding tax at a rate of 26% on investment income in ‘social lending’ obtained by individuals on a par with other financial income. However, it is important to remember that the withholding tax can only be applied by registered financial intermediaries and payment institutions (articles 106 and 114 of the TUB). During 2019 we completely overhauled the platform, both from a front-end and a core banking point of view, which led us to the complete digitisation of the processes.

How much did covid19 impact your business?

In general, while governments in different countries were taking major action in response to Covid-19, companies were adapting quickly to the evolving needs of their employees, customers and suppliers to meet both operational and business challenges. Smartika’s processes are full digital, so we have had no particular operational impact in managing our business. Financial operators in this phase played a fundamental role in guaranteeing liquidity to the real economy but were faced with a series of critical operational issues. The areas particularly impacted were funding, customer management, human resources, credit risk, technological infrastructure and regulation.
Smartika is a P2P lending platform which, as a Payment Institution, is not subject to some of the critical issues mentioned above, such as funding, which derives from the offers of private lenders who intend to finance the requesting customers through the platform, and credit risk to which Smartika is not exposed, since it is not a lending institution.

Have you identified any different trends in your market during the lockdown period?

As is well known, the spread of COVID-19 has led, among other things, to the freezing of economic activity, which has produced tensions in financial markets and downward estimates compared to expected world growth rates. As anticipated, Smartika is not directly impacted by credit risk. From the point of view of behaviour, we have noted a change in the purpose of the financing with an obvious abandoning of travel and holiday purposes (recorded until January 2020) and an increase in requests for the purchase of means of transport, furniture and household appliances from the month of March. From the lenders’ point of view, we have noticed a greater caution in investments from the month of March.

Have you launched a P2P lending platform in open banking mode and if so, what are its peculiarities compared to those existing on the market?

The new platform, the first to be developed entirely in the cloud and based on innovative technologies in open banking mode, has allowed us to offer our lenders the opportunity to indicate their preference in relation to the category of projects to be financed: “Restructuring and energy saving”, “Family expenses” or “University and training”. Smartika wants to be more and more attentive to the needs of its customers. That’s why we have taken this opportunity to renew the customer’s experience by making the best use of what is available today in terms of technological innovation, to allow flexibility and continuous improvement in the use of the platform all necessary for making a difference on the market.

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