What does the future of European banking actually look like, in a world of perpetual crisis, heavy regulation, and consolidating […]
What does the future of European banking actually look like, in a world of perpetual crisis, heavy regulation, and consolidating institutions?
Annarita Morelli, a strategy and governance executive who has worked on the front lines of Italy’s financial system, joins Ricardo Silvestre on the Liberal Europe Podcast, to make the case for proximity banking, smarter resilience, and a financial sector that supports the real economy. From the reactive trap that keeps banks running on a treadmill, to the funding gap holding back small businesses, to what she calls the human algorithm of territorial banking, this is a conversation about how Europe can grow without losing the local trust that makes finance work.
This podcast is produced by the European Liberal Forum in collaboration with Movimento Liberal Social and Fundacja Liberté!, with the financial support of the European Parliament. Neither the European Parliament nor the European Liberal Forum are responsible for the content or for any use that be made of.
This podcast, as well as previous episodes, is available on SoundCloud, Apple Podcast, Stitcher and Spotify.
You can follow Annarita on LinkedIn, and read some of her work in governance and organisations, AI governance, and competitiveness and the Draghi Report.
You can also see the ECB Report mentioned during the conversation here.
This conversation was recorded during the event ‘Governance without Goals? Restoring Strategic Vision in European Finance and Industry’, organised by the Adam Smith Society in Milan.
Ricardo: Welcome to the Liberal Europe podcast. I’m your host, Ricardo Silvestre, and thank you so much for listening to today’s episode. For this one, we’re going back to Milan, where I had the pleasure to talk with Annarita Morelli. Annarita is an operations and governance executive focusing on wealth management and the launch and monitoring of financial products tailored for top clients. She also has a career as a strategic, corporate, and governance executive navigating complex financial and regulatory environments. We talk about banking in the EU, from the resilience of the system to helping small and medium enterprises, and a territorial model for the financial sector, something Annarita has deep experience with. This conversation was recorded live during the event “Governance Without Goals: Restoring Strategic Vision in European Finance and Industry,” organised by our friends from the Adam Smith Society in Milan, whom I thank so much for the opportunity to be in Milan and to spend time with Annarita. But now, with no further ado, I bring you Annarita Morelli.
Annarita: Thank you, Ricardo. It’s a great pleasure to be here. Before we start, I would like to make a brief disclaimer. I am participating in this podcast in my personal capacity, as an expert in the banking sector. The views and opinions I share today are strictly my own and do not necessarily reflect the official position or policies of the banking group I work for. I have spent most of my career at the intersection of strategy, operations, and governance within the banking sector. If I had to describe my professional DNA in one word, I would use the term troubleshooter. My journey has always been about managing high complexity. During my years in consulting at EY, I was on the front line during some of the most critical and challenging moments for the Italian financial system. I personally managed bail-in procedures and worked on systemic recovery projects like Fondo Atlante. For many, those were nightmarish scenarios, but for me they were a unique school. They allowed me to understand how the engine of a bank truly works when it is under extreme pressure. In my executive roles, I focus on product governance and operational transformation. What does this mean in practice? I translate high-level European regulation and board vision into concrete, executable banking operations. My goal is to ensure the bank’s engine is not just compliant, but agile and human-centric.
Ricardo: Let’s get into my first question. It has to do with the state of multi-crisis — I know our Italian friends know this well. How can business in the EU move from a more reactive system, always responding to crisis, towards a long-term strategy, as Alessandro was mentioning, that long vision politicians sometimes don’t have?
Annarita: Thank you, Ricardo, for the question. These are million-dollar questions. In the last few years, the European Union has been living in a state of perpetual emergency. We had the pandemic, the energy crisis, the geopolitical shift, and a massive wave of regulations. In the banking sector, this has created what I call the reactive trap. We are so busy responding to the latest crisis, or the latest rule from Brussels, that we have lost the habit of looking at the horizon. We are running very fast, like on a treadmill, but we are staying in the same place. Mario Draghi’s report is a wake-up call. He is telling us that Europe is losing its competitive edge. Why? Because our system is too heavy. If we want to move from a reactive mode to a long-term strategy, the first thing we need is simplification. Think about it: today, a bank’s board of directors spends about 80% of its time discussing compliance, and only 20% on its own strategy. It should be the opposite. Draghi is very clear: the regulatory burden is not just a cost, it is a barrier to innovation. To develop a long-term strategy, we need a system that is predictable. You cannot build a 10-year plan if the rules change every 16 months. The second step is a shift in mindset. Long-term strategy means moving from compliance-driven to innovation-driven. In my work, I see that we often implement rules just to tick a box. But a proactive system uses regulation as a framework for growth. This is about the empowerment of the banking sector. For example, instead of seeing ESG rules as just more paperwork, we should see them as a way to identify new markets and new needs for our clients. Strategy is about choosing where to go, not just avoiding obstacles. We need to stop asking what does the law require, and start asking what does our economy need 10 years from now. In conclusion, the Draghi report gives us a map, but we need the courage to follow it. Moving to a long-term strategy requires us to clean up the complexity. We need to invest in technology to automate the reactive part of our work, so that our human intelligence can focus on the proactive part. If we simplify the rules and focus on productivity and competitiveness, we don’t just survive the next crisis, we actually shape the future of the European market. It’s time to get off the treadmill and start walking towards a clear destination.
Ricardo: You have very specific knowledge about banking. We just got a report from the European Central Bank saying that the EU banking sector faces a complex external environment. Their recommendation was to strengthen resilience to geopolitical and macrofinancial uncertainties. Tell us from your experience: as you read this report from the ECB, what are some practical solutions to deal with these clearly defined problems?
Annarita: The ECB is sending a very clear message: the world is no longer a stable place. Geopolitical risks translate directly into financial risks. But here is my point. For many people, resilience is just a number. After years of managing crises on the ground, I’ve learned that true resilience is a muscle, not a number. It’s about operational agility. A bank can have all the capital in the world, but if its internal processes are too rigid, it will break when a macrofinancial storm hits. To build this muscle while meeting the ECB’s expectations, I see three practical paths. First, we must consider strict supervision not a burden, but a discipline. To remain competitive, we must move from static to dynamic governance. In many banks, risk assessment is done once a year, and that is not enough. The practical solution: we need a governance structure where the board doesn’t just read reports, but actively monitors geopolitical impact on a weekly basis. We need a system where information flows from the bottom up in real time. Reducing internal barriers to information is key. Resilience means being ready for the unexpected by design, not by chance. Second, stress testing. Often, banks see stress tests as a regulatory exam, something belonging to the past. I see them as a strategic workout. We shouldn’t just run the scenarios the ECB gives us. We should create our own custom stress tests. For example: what if a specific supply chain breaks? What if we have a sudden cyber attack combined with a market liquidity drop? By running these exercises internally, we can reinforce our buffers where they are truly needed. We don’t just build buffers because we are told to, we build them to protect our long-term productivity. Finally, we need simplification. Complexity is a risk. When a bank has too many levels of bureaucracy, it becomes blind to external shocks. A practical solution is to declutter the organisation. We need to simplify our internal product governance. If a product is too complex to be managed during a crisis, it shouldn’t be on the market. By simplifying the engine of the bank, we make strict supervision more effective and less expensive. In conclusion, to deal with uncertainty, we need better execution. We need to be agile, test ourselves constantly, and be transparent. That is how you turn uncertainty into a manageable business environment.
Ricardo: Let’s talk about small and medium enterprises, SMEs, as you mentioned a minute ago. There are still many roadblocks to accessing funding in the banking sector, particularly with this twin transition between green and digital. What changes would you recommend to have a more flexible banking system inside the European Union, capable of supporting these businesses and their investments in innovation?
Annarita: This is a crucial point. SMEs represent over 99% of businesses in the European Union, yet they face a funding gap when it comes to the twin transition — the simultaneous shift to green and digital. The main roadblock today is a language gap. When an SME wants to invest in a new digital platform, they are looking at the next 10 years, but traditional banking systems often look at the last three years of balance sheet. To support this transition, we cannot drive looking only in the rear-view mirror. We need a banking system that looks through the windshield, at the road ahead, to protect our long-term competitiveness. The first change I recommend is moving towards forward-looking risk assessment. Traditional credit scoring is great for stability, but it’s terrible for innovation. We need to integrate technological and sustainability ratings into our credit models. The practical solution? Instead of just asking how much did you earn, we should ask: how will this digital investment reduce your operational cost? How will this green transition protect you from future carbon taxes? We need to assess the viability of the project, not just the history of the company. If we value intangible assets like digital IP, we provide real empowerment to innovative entrepreneurs. The second change is about simplicity. Mario Draghi mentioned the regulatory burden, and for an SME this is a nightmare. A small family business doesn’t have a sustainability department to fill out 500-page ESG reports. If we want an agile banking system, we need a level playing field where rules are proportional. You cannot ask a small bank to provide the same level of ESG reporting as a multinational corporation. By reducing this barrier and using a standardised digital platform, we allow the bank to be agile and the business to stay focused on its work. Finally, we need to change the role of the banker. The bank should not just be a lender, but a strategic partner. An agile banking system should act as an advisory hub, helping businesses understand which technology is actually worth the investment. By helping the SME choose the right path, the bank is also reducing its own risk. It’s a win-win. We need to move from a culture of “no because” to a culture of “yes, if.” In conclusion, we don’t need to lower our risk standards. We need to sharpen our vision. If we look at future potential and simplify the process, we grow the entire European economy.
Ricardo: Very good. I’m going to have a follow-up on that, but don’t worry, it connects to the next question. You said the bank should be a partner. You have worked on what is called a territorial model for the financial sector. I’m going to ask you to please explain that briefly, and then: how can this be transformed into a solution to ensure resilience in local economies? I work in a territorial bank myself, so I know what we’re talking about.
Annarita: Thank you, Ricardo, for this question. This is the perfect question to conclude our conversation. When we talk about a territorial model, or proximity banking, many people think of the past. But I believe it is actually the most innovative solution we have for the future. In a world dominated by big data and global algorithms, we risk losing the most important element of a financial context. A central algorithm in a faraway capital city cannot understand the specific dynamics of a local industrial district. The territorial model is innovative because it uses soft information — knowledge of the person, the history, and the community that a computer alone simply cannot capture. I like to call it the human algorithm. In a territorial model, the banker is physically there. This proximity is the best risk management tool we have. Why? Because when a crisis hits, a large systemic bank might decide to retreat based on a general trend. But a territorial bank stays. It acts as a social and economic anchor. By knowing the entrepreneur personally, the banker can distinguish between a business in temporary trouble and a business that is failing. This prevents economic desertification. It ensures the engine of the local economy keeps running. This is the true meaning of operational resilience. However, we must be realistic. Today, the banking sector is undergoing a massive process of consolidation. This is necessary for stability and for investment in technology. But the challenge, especially in a market like Italy, is to grow in scale without losing the soul. We must ensure that regulatory harmonisation doesn’t become blind standardisation. We cannot manage a country of small artisans with the same rigid models used for giant corporations. We need strategic proportionality: the power of a large group, but the decision-making of a local bank. This is the principle of subsidiarity applied to finance. In conclusion, the territorial model is not a luxury. It is a strategic necessity. The Draghi Report calls for more competitiveness. In Italy, our competitiveness comes from our roots. By combining modern digital tools with the unique values of territorial banking, we can create a system that is both stable and human-centric. We need to move towards a future that is not less human, but more human. Because at the end of the day, finance is not about moving numbers. It’s about moving trust. And trust is always local. If we protect this model, we protect the future of our communities.
Ricardo: Yes, this is the tension between subsidiarity and consolidation. Your point is very well taken, because we do need that proximity of the banker who understands not only the client, but the project, the environment, the risks associated. Thank you so much for that contribution. Now, in the last seconds I have with you, and thank you again for coming to the podcast — tell us, are you online? Can people follow your work on social networks?
Annarita: This has been a truly inspiring conversation. Thank you, Ricardo. For those who would like to connect and follow my reflections on these topics, the best place to find me is on LinkedIn. You can find me by searching for Annarita Morelli. I’m quite active there because I believe LinkedIn is a great platform for sharing food for thought on the evolution of banking governance, product management, and the challenges of the real economy.
Ricardo: I’m going to put the link in the podcast show notes directing exactly to the LinkedIn profile of Annarita Morelli, our guest for this very interesting conversation. Annarita, thank you so much for coming to the podcast.
Annarita: Thank you.