Opinion

The future of the FinTech industry in Romania and beyond

Over the past few years, FinTechs have been intentionally accustomising us to independence since this is a great way for companies to reduce the cost of customer services. With that cost-cutting opportunity in mind, more and more companies providing loan services, currency exchange, servicing payments or even standard banking services, are gladly accustoming themselves to this new digital climate. Nevertheless, many other companies, especially those specialised in finance, insurance or debt collection are having difficulties adapting to new conditions and digital trends.

Traditional industries that are having, or have had, difficulty adapting to new digital trends will soon will have to face a major threat, Payment Service Directive 2 (PSD2). Once PSD2 enters into force, the FinTechs will significantly grow into force. PSD2 will bring the largest revolution so far seen in the financial services industry – it will dethrone the banks by abolishing their monopoly and will set the new rules of the game. From the moment of its implementation, clients will be able to acquire and use more and more innovative services from non-banking financial institutions and FinTechs while being subject to the same rules of safety and security, which of course remain the priority. Surely there will be new players emerging on the financial services market, able to provide services that were so far only reserved for banks.

While the traditional financial services industries will be busy competing with FinTechs, and vice versa, the real winner out of this situation will be the clients. While initially FinTechs based their services on client independence, today we see that even those companies active in the digital sphere are starting to realise that clients actually miss the opportunity to discuss or meet with a financial advisor, as is still possible when using the services of traditional financial providers. Of course, we cannot yet talk about a serious metamorphosis of the FinTech industry, but we see that more and more providers of financial services online are coming back to having direct contact with the client as an additional way of building and keeping relationships. This is the model that we, as Aforti Exchange, have undertaken and we believe that this is our competitive advantage – being online-based and guaranteeing independence while, at the same time, offering our clients personal support, be it over the phone or even in person.

So even though we are already in the era of FinTechs and their role, as well as market share, will keep increasing, we are confident that there are a number of rules that need to be respected and remembered by companies active in the FinTech field or those that are currently adapting to the newest, digital trends:

  • The client still feels the need to be noticed and supported;
  • Financial products must be simple – no one likes to feel ignorant, especially when it comes to the world of finance where the client might feel lost and the role of FinTechs is to make them comfortable;
  • Timely execution is the king and will always be the key competitive advantage, which in the world of ‘ASAP’ might even outweigh cost criteria;
  • Pricing must be competitive compared to those offered by banks and other standard financial institutions.

As FinTechs are currently one of the fastest growing technology industries in the world, there is no doubt that the financial services markets will undergo a major transformation in the coming years. As the regulatory environment is and will continue adapting to this new realty, so will the traditional financial services providers in order to keep up with the competition and maintain their position in the market. This will lead to a situation where clients will finally have a wide array of different financial products at their fingertips and will have a much larger pool of opportunities to choose from. PSD2 is a significant step towards a digital single market.

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The views expressed in this opinion editorial are the author’s own and do not necessarily reflect Emerging Europe’s editorial policy. 

About the author

Aleksandra Wodzisławska

Aleksandra Wodzisławska

Aleksandra Wodzisławska is the CEO of Aforti Exchange.

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