In recent years there has been an increase at the level of investment in what is considered the Fintech sector, that is, the industry related to financial technology. Fintech is an emerging sector with many actors with different verticals. It is estimated that there are some 2,000 Fintech companies worldwide that work with around 20,000 million euros of financing.
Access to financial markets
The objective of these companies to democratize access to financial markets, making simplicity their main standard. With the purpose of helping each other and being much more competitive, six Fintech companies in Spain have created the ‘Association of Financial Technology Companies in Spain’. These companies have a series of criteria to boost their creation:
- Why financial technology the future of financial services.
- To promote and support Fintech companies in Spain.
- Why it is necessary to start communicating the activity of the sector to society.
- Collaboration contacts should be initiated with administrations to eliminate growth barriers since it is necessary to collaborate to achieve regulation.
- Promote a competitive environment with financial companies considered traditional.
- Promote the values of transparency, honesty in prices, cooperation and guide the user.
Financial technology is a new phenomenon
We must think that financial technology is a new phenomenon in Spain. Now it is in a phase of creation and construction of the credibility of Fintech, and the reputation will allow an increase in the introduction of these services.
In the Fintech sector in Spain it is in tow from countries such as the United States and the United Kingdom. It is expected that if competitiveness does not increase there will be an entry of foreign companies that will have enough capital to occupy the sector. Currently, the Fintech market is a very small market and, at present, there are no barriers to entry.
Beginning to emerge many new initiatives
In Spain there is great talent around the financial sector, which are beginning to emerge many new initiatives. Therefore, the regulation of the Fintech sector is a fundamental piece which the association claims from the beginning.
We can comment on the characteristics of the Fintech sector ecosystem in Spain:
- Not having complexes with technology: not having any complex about technology adoption in Spain. Spain is in the countries with the highest adoption of Smartphones and Mobile Commerce.
- Accessibility to talent: there is a great difficulty in retaining talent in engineering profiles, data scientist and programmers, … but in Spain there are many universities that have well prepared graduates.
- In ‘Market Fintech Map’ almost complete: the ecosystem is already in many verticals of Fintech.
- Financing: in recent years the ecosystem in this regard has improved in Business Angels, Friends & Family, Corporate Venture Capital … with quality and quantity.
But there are also shortcomings in which the Fintech ecosystem in Spain must work:
- Missing a germ for the ecosystem, which could be banking .: in Finland the germ that started the ecosystem was the Cellphone company, in Israel they were companies from around the army, but in Spain it has not yet been achieved that there is an ecosystem Fintech at this level. Therefore, banking in Spain must become this innovative germ.
- Missing entrepreneurial culture: the lack of entrepreneurship is a brake compared to other ecosystems such as the United States, India, Israel … since the cost of failure in Spain remains high. The ambition of entrepreneurs is very limited, since there are people who want to change things.
- Streamline administrative procedures: in Spain the procedures are complicated to set up any type of business partnership.
We can highlight from the ecosystem of Spain to Good Finance. It offers the following services:
- The advance of invoices allows to obtain advances on commercial credits pending collection. On the platform one or several invoices can be auctioned between professional investors who will purchase the credits from their sales by bidding on them offering the best price.
- Discount of promissory notes allowing to cover working capital needs. Companies can compete with the investor community and offer the best possible price based on credit risk.
- Confirming Supply Chain Financing line, suppliers can be offered financing without altering payment terms.
Internationally we can find the references:
- PayALL is a startup that offers an alternative to traditional payment loans.
- SecureCash is a startup that defends online security authentication in users by performing identity tests.
- VeriCash is a startup that offers a specialized electronic identity verification program for payment providers and financial services.
- AlgoFast is a solution to manage investments automatically. The software works with an algorithm created to measure the risk tolerance of each operation.
BuyandSell is a securities brokerage that allows, through an app, to buy and sell publicly traded shares without being charged commissions.