Did you know that there are 78 Fintech startups in Italy? Thanks to Riccardo Luna. editor at StartupItalia! and CheBanca! you can see all 78 in the Fintech Atlas of 2015 (as long as you can read Italian).

So, I sought a tour guide who was happy to speak to me in English. Luckily I found Fabrizio Villani of FintechItalia. Fabrizio is an Italian Fintech entrepreneur currently living in Barcelona and familiar with the London and Amsterdam Fintech scenes (so he can contrast what he sees in Italy with the Fintech scene in other cities).

The usual villains star in this brain drain story – difficulty in getting funding and lack of innovation by the big banks. Yet the big banks in Italy, such as Unicredit, Intesa San Paolo and Banca Sella are keen to find this innovation. For example, Unicredit has set up a Fintech Accelerator. If you know of any other Fintech Accelerators in Italy, I will add them to this list. Also CheBanca! is clearly seen as a digital innovator, what the UK market calls a Challenger Bank.

As with so many other centers, there are innovative startups and innovative customers but these two dots are not being efficiently connected.

Startups need three types of fuel:

• Technical talent. Italy has plenty of home-grown talent and a quality of life that will draw developers from other countries if the other types of fuel are there.

• Innovation Capital. Italy scores badly on this front. Germany, Switzerland, France, even Spain does better.

• Bandwidth. This is the simplest thing for the Government to fix and they are working on it. Prime Minister Matteo Renzi approved last week a 6 billion euro plan to build a nationwide fibre optic network by replacing the ageing cooper wires that run into subscribers homes and companies

Fabrizio identified the following promising Fintech ventures in Italy:

• Moneyfarm. is a Personal Financial Management robo adviser that enables people to get started with small amounts of around 20,000 euros, “without having to pay consultants that can cost up to 400 euros for half a day”, explains Giovanni Daprà, who in 2011 conceived the startup with Paolo Galvani and Andrea Scarso.

• Ekuota. is a corporate finance platform targeted at CFOs, using analytics and reporting tools in order to better understand their financial risk exposure, simplify hedge, value price derivatives and improve risk exposure transparency.

• Wadex. Wadex is a web-based platform that offers an innovative matchmaking service for supply and demand of Secondary Raw Materials. Their vision is to create a market of secondary commodities that is as structured and efficient as that of the stock market, but that excludes the speculative component. Wadex allows industries operating in the recycling market to bypass the auction system on the upside for the supply of lots of secondary raw materials, and to protect themselves from the volatility of the market price through an innovative method of pricing management, saving money and eliminating the uncertainty by deciding in advance their production budget. A proprietary algorithm, based on five factors (price deposit time Value distance customers), processes the proposals, thus identifying the best counterpart for the transaction.

• S-peek. analyzes the balance sheets of companies to calculate their health status, in order to come up with an easy and intelligible rating.

• Squeezol. is the new system for organizing events, gifts and other sharing experiences. It allows a group of people friends, colleagues, family, groups to build up a collection online where everyone can pay their share through. With Squeezol it is possible to create or join a collection in 3 clicks: create a collection and invite friend through Facebook or Google contacts, select “Pay with Squeezol on an e-commerce partner website.

• Sardex. In Sardinia in 2014 goods and services worth 32 million euros were exchanged without using a single euro. This small miracle was made by a startup from Serramanna, a community of 9,000 inhabitants in the province of Medio Campidano, founded in 2010 and, which, in 2014 earned 1.2 million euros. It is called Sardex.net and is a virtual currency that was created in order to support small local businesses during the credit crunch. Today, after a registration on their platform, Sardex can be used to make payments throughout the entire island of Sardinia.

So the question for Italy asks Frabrizio is: “can we convert these fine craftsmen of Fintech products into global players and see Italy raise again and live a new Renaissance?” These few examples raise our hopes.

Fiserv is one of those quiet success stories that is common to B2B ventures that dominate niche markets; they dont need to tell their story to consumers. The difference is that the niche which Fiserv dominates is very, very big.

Fiserv is part of the Emergent Fintech Public Index. In fact they are probably the bellwether of the Fintech Index. Lending Club is obviously better known due to a recent IPO but at 35x revenue (yes, you read that right, that is revenue not profit multiple), Lending Club are too far removed from an ordinary company to be a bellwether or a comparable. You are betting on Lending Club being the Facebook in a network effects winner takes all story.

Fiserv’s market cap is around $18.5 billion, which is more than 2x Lending Club’s market cap, without any nosebleed valuation multiples.

If you were smart enough to buy Fiserv stock in March 1990 at just below $1, you would have a 77x return over 25 years (stock is currently over $77 per share). $100,000 would have turned into $7.7m. That is nearly 20% IRR over 25 years and I think that even beats Warren Buffet’s track record.

So Fiserv must be doing something right.

Fiserv is not well known outside circles of those who work in Fintech or who have been smart enough or lucky enough to be an investor.

The accepted breakdown in Fintech is between Emergent and Traditional. This was the breakdown defined in the E&Y study for UKTI. In simple terms Emergent means services direct to consumers and businesses = “eating the bank’s lunch” = young, fast growing, exciting. Traditional = selling technology to Banks = old, slow growing, boring.

In that simplistic categorization, Fiserv is boring and Traditional. Fiserv is clearly not boring. When you see that kind of “it works in practice, but not in theory”, it is time to re-visit the theory. In this case, re-visit the theory of a neat breakdown between Emergent and Traditional. That theory is based on the idea of disintermediation. Looking at past tech waves of change, it is almost never disintermediation; it is usually re-intermediation.

Fiserv serves Banks, but not the big Banks that have been the target of traditional enterprise software vendors. Fiserv primarily serves small Banks. In America, these would be Community Banks. In Germany, these would be Sparkasse. They are local bankers who thrive on local relationships (as in “lend to people you know and trust”). They are too small to have their own IT, so everything is outsourced on what used to be called timesharing and is now called Cloud. So a vendor to those small firms has low churn and high moat, because it is tough to break into that market and so the customers renew because they don’t really have a viable alternative. As long as the vendor keeps their product relevant to a changing world, the customers get agility and the vendor gets to keep that dominance.

The broader story of re-intermediation is playing out in Private Equity through vehicles such as Angel List Syndicates. It is not that Fund Manager are disappearing and consumers buy everything direct, it is that new types of Fund Manager are appearing. Amazon is an intermediary, just a different type of intermediary than Barnes & Noble. I am also seeing this re-intermediation in Wealth Management through Fintech startups that are serving the small wealth advisory firms. In the lots of small and agile beats a few big and cumbersome theory that Ronald Coase set the framework for. small banks will thrive and so Fiserv will continue to thrive.