Fintech – How Are Innovations at the Intersection of Finance and Technology Born?
The financial sector cannot remain indifferent to the digital revolution happening before our eyes. However, innovation and the rapid pace of change in this area already have a name. It is FinTech
What is FinTech?
FinTech represents a distinctive fusion of financial services and technology that has undergone rapid evolution over the past decade. It plays a pivotal role in digital payments, digital commerce, and mobile POS (enabling offline payments through digital payment technology).
What sets it apart? FinTech facilitates the augmentation of revenues from digital sales, aids decision-making through data analysis, and streamlines processes and collaboration. Its development is propelled by the escalating expectations of customers who demand multifunctional transaction systems, seeking simple, functional, and convenient solutions for efficient management of their financial resources.
Fintech in Poland and Around the World
China currently leads the global Fintech market, achieving a transaction value of $2496 billion in 2020, making it the leader in digital payments. The United States is the second-largest player, with 10,605 financial technology start-ups in February 2021, according to Statista. The main specialisation in this region is the personal finance segment.
What is the situation in Poland? The year 2019 marked a milestone for the development of Polish Fintech when sharing bank customer data with third parties and processing payments by companies other than the bank, without the need for separate agreements, became possible.
A high level of innovation and economic growth means that Poland is seen as a driving force for Fintech, and Polish companies operating in this industry have been receiving more and more support from foreign investors. The estimated value of the market currently amounts to about £860 million. According to the “map of Polish fintech” developed by cashless.pl in 2020, it is mainly formed by sectors such as:
- payments – 23.4%
- corporate finance management – 11.3%
- personal finance management – 9.5%
- internet currency exchange – 7.7%
- loan companies – 7.2%
- loans and mortgages- 7.2%
- Blockchain and cryptocurrencies – 4.5%
- factoring – 4.5%
- software providers – 4.5%.
Challenges and Secrets Behind Success in the Financial Technologies
What are the common challenges faced by companies implementing a FinTech strategy? These include:
- Regulatory risks, security, and data protection issues
- Use of outdated systems and challenges with comprehensive implementation of new solutions
- Data management structures that are not FinTech-friendly
- Lack of understanding of the FinTech area and the benefits it guarantees
- General reluctance to implement innovations
Despite numerous challenges, confronting them is essential to fully reap the advantages of financial technologies. Factors determining success in implementing solutions in this area can be categorized into three main groups.
Transformation of Work Culture:
- A holistic approach to implementing new technologies and analysing their impact on every business area
- Developing digital competencies within the organisation
- Enhancing the process of learning and performance management, and nurturing employee well-being
Digitalisation:
- Personalisation and adaptation to customer needs
- Robotisation and automation coupled with the human element
- Cybersecurity treated as a business priority
- Full transparency in customer relations and utilisation of new technologies
Transactions:
- A collaborative model
- Proper planning of implementation and testing in the MVP model
The Most Important Technology Trends
As highlighted by the authors of the CFA Society Poland and Spot Data report “The Future of the Financial Sector: Evolutions and Revolutions,” the crucial elements of technological change in finance include Blockchain, Cloud, Big Data, and Artificial Intelligence.
Blockchain can enhance the efficiency of financial transactions, reducing the cost of services. It facilitates international payments, reduces processing time, and allows immediate clearing of transactions without manual intervention. It transforms the banking sector, ensuring greater transparency, efficiency, and cost-effectiveness for employees and customers.
The cloud diminishes the cost of operating a banking business and simultaneously eliminates market entry barriers. Its implementation enables financial institutions to offer unique benefits, better manage and analyse bank data, solve problems more efficiently, and reduce data storage costs. According to Deloitte’s estimates, global spending on the cloud in the financial business is expected to reach £29.5 billion this year, reflecting an increase of almost £20 billion in just five years.
Big Data and business analytics are pivotal for a profound understanding of business practices and customer behaviours, enabling the FinTech industry to create better, faster, and more user-centric services and solutions. According to a 2019 study by IDC, global revenues from Big Data are anticipated to reach £260 billion by 2022.
Artificial Intelligence is primarily implemented in FinTech companies to automate and robotise processes. In this case, the focus is on how to implement AI, driven by the goals of saving time and money and improving customer experience.
How Can Euvic Support Your Fintech Solutions?
Through our MVP as a Service approach, we aim to swiftly validate our FinTech clients’ business ideas and bring them to life using technologies such as AI, ML, Big Data, Blockchain, RPA, VR, and others. We offer support to clients in areas like:
- Cryptocurrency exchanges – online sales
- Virtual assistants – chatbots based on artificial intelligence for easier product discovery
- Virtual wallets – currency exchange and payment solutions
- Mobile banking applications
- Platforms for financial services (multi-bank loans, product comparison tools, and mobile insurance)
- Platforms for managing complex investment products
Though translating FinTech solutions into specific implementations remains challenging, it is not impossible. The key lies in finding the right business partner to support all project stages, especially the transition from the pilot phase to implementation. As a technological partner with extensive experience, we take full responsibility for innovative technologies, assisting clients in developing ideas for commercialisation and monetisation.
Contact us, and let’s discuss how we can assist you.
