FinTech

FinTech is a unique combination of financial services and technology that has evolved incredibly fast over the last decade. It plays a crucial role in digital payments, digital commerce, and mobile POS (making offline payments using digital payment technology).

What makes it special? FinTech allows you to increase revenues from digital sales, support decision-making based on data analysis, and optimize processes and collaboration. The driving force behind its development are the constantly growing expectations of customers, who nowadays require a lot of features from transaction systems, expecting simple, functional and convenient solutions that allow efficient handling of their financial resources.

China is currently the largest global FinTech market. As the leader in digital payments, it was able to reach a transaction value of $2496 billion in 2020. The second-largest player, on the other hand, turns out to be the United States. According to Statista, in February 2021, there were as many as 10605 financial technology start-ups in America, and the main specialization of this region is the personal finance segment.

What is the situation in Poland? The year 2019 was a milestone for the development of Polish FinTech, when it became possible to share bank customer data with third parties and process payments by companies other than the bank, without the need for separate agreements.

With a high level of innovation and economic growth, our country is seen as a powerhouse for FinTech, and Polish companies operating in this industry are increasingly receiving support from foreign investors. Poland is at the forefront of FinTech in the Central and Eastern European region and the estimated value of the market is EUR 856 million.

What are the most common challenges faced by companies internally implementing a FinTech strategy?These include, primarily:

• regulatory risks, security, and data protection issues,
• use of obsolete systems and problems 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.

Although there are many challenges, it is worth facing them to be able to fully benefit from the advantages of financial technologies.

What factors determine the success of implementing solutions in this area? They can be divided into three main categories:

1. Digitalization:

• personalization and adaptation to customer needs,
• robotization and automation combined with the human element,
• cyber-security treated as a business priority,
• full transparency in customer relations and use of new technologies.

2. Transformation of the work culture:

• a holistic approach to implementing new technologies and analyzing their impact on every business area,
• developing digital competencies in the organization,
• improving the process of learning and performance management, and nurturing the well-being of employees.

3. Transactions:

• a model based on collaboration,
• proper planning of implementation and its testing in the MVP model.

As pointed out by the authors of the CFA Society Poland and Spot Data report “The Future of the Financial Sector. Evolutions and Revolutions”, the most important elements of technological change in finance include Blockchain, Cloud, Big Data, and Artificial Intelligence.

Blockchain can have an impact on making financial transactions more efficient and thus also reducing the cost of these services. It is a technology that facilitates international payments by reducing costs and processing time, and in addition also allows for immediate clearing of transactions, without the use of partially manual solutions. It is transforming the banking sector, guaranteeing its employees and customers greater transparency, efficiency, and cost-effectiveness.

The cloud reduces the cost of running a banking business and at the same time removes some of the market entry barriers. Its implementation in financial institutions makes it possible to offer unique benefits, better manage and analyze bank data, solve problems more efficiently, and reduce data storage costs. Not surprisingly, according to Deloitte’s estimates, this year global spending on cloud in financial business should reach USD 29.5 billion, which in practice means almost a 20 billion increase in just 5 years.

Big Data and business analytics are critical to a deeper understanding of business practices and customer behaviors and needs, thereby enabling the FinTech industry to create better, faster and more user-centric services and solutions. This innovation is what enables companies to maintain their competitive edge and, in turn, continue to grow. It is gaining more and more supporters every year.

Artificial Intelligence, on the other hand, is implemented in FinTech companies primarily to automate and robotize processes. So in this case nobody wonders whether to implement AI, but rather how to do it, and the driving force behind projects in this area are primarily savings of time and money and improvement of customer experience.

Using our MVP as a Service approach, we aim to validate our FinTech clients’ business ideas as quickly as possible and bring them to life using such technologies as AI, ML, Big Data, Blockchain, RPA, VR, and many others, as well as such approaches as Lean Startup, Design Thinking or Open Innovation.

We offer our support to clients in this sector especially, in such areas as:

• cryptocurrency exchanges – online sales,
• virtual assistants – chatbots based on artificial intelligence that make it easier to find financial products that meet the needs of a particular user,
• 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.

Although translating FinTech solutions into specific implementations is still difficult, it is not at all impossible. What is needed, however, is the right business partner to support all stages of the project, especially the transition from the pilot phase to the implementation. As a technological partner with many years of experience, we can take full responsibility for innovative technologies, while helping our clients develop ideas for their commercialization and monetization.