The Bank of Italy is stepping up oversight of smaller lenders that increasingly rely on online deposit platforms for funding. These digital channels allow banks to raise retail deposits across borders, but regulators warn they pose heightened liquidity risks.
The warning follows the collapse of Silicon Valley Bank in March 2023, triggered by rapid deposit outflows. Digital deposits can accelerate withdrawals during stress, raising supervisory concerns.
Italy’s smaller institutions-known as Less Significant Institutions (LSIs)-face particular exposure. As of December 2025, 30 LSIs held €11.5 billion from online platforms, representing 10% of their total funding. The top five accounted for three-quarters of that sum.
While online platforms offer access to the European retail deposit market, the Bank of Italy warns these deposits are more volatile and carry elevated money laundering and terrorism financing risks.