There is little doubt that the fintech sector will be the catalyst that enhances efficiency and user experience across all banking services. So far though, reality hasn’t exactly lived up to the hype. This is particularly true in Spain, where leading financial institutions (by market volume) have been especially reluctant to embrace this natural technological evolution, thinking they’ve been ‘doing fintech’ for years. If they are market leaders, it must be because they’ve been on the right track all along … right?
Not so much. The problem is that banks are overlooking the fact that the word ‘fintech’ doesn’t just mean more advanced technology, but rather the holistic improvement of the end user’s total financial experience thanks to the overall improved efficiency of financial services.
We are already seeing new players entering this arena, and the coming years will see even more, since new regulations from the EU mean that a ‘bank’ in or from the UK or Germany can deliver services in Spain. The evolution is slow, but sure, and large local institutions will have to make increasingly drastic moves to keep pace and maintain a competitive advantage. Some of these might be:
- significant downsizing and reorganization of staff
- collaborating with (not competing with) pure fintech startups to facilitate their access to efficient technologies
and above all:
- changing mentalities and refreshing organizational models that date back to the 1970s.
The next trend that revolutionizes fintech in Spain
First of all, we will see new banks. Some will be fresh faces, while others will be forged from more familiar established brands. After meeting their initial objective of existence, the next step will be to attack the retail banking segment.
We will also see new initiatives aimed at business banking customers, especially within segments affected by the obsolescence of current services offered by banks. In this sense, we have seen Spanish fintech companies such as Kantox (foreign exchange for businesses) and Novicap (loans) compete, but without any interconnection between them. We have yet to see any real Spanish hubs or technological networks to bring these new services together, along with new players and satellite banks for these initiatives, but it won’t be long before this gap is filled.
Another turning point in 2016 will be blockchain. The research carried out in recent months in this field has uncovered its revolutionary potential for the entire financial industry, from retail banking with P2P payments to international money transfers, to mobile payments and beyond. Imagine business banking with international payments in real-time, nearly-free payment solutions, and so on. In the investment banking and capital markets space, picture buyouts and reconciliation simultaneously removing large central agencies that regulate the flow of financial assets … and this is just the beginning!