An enterprise must be innovative, flexible, and have a competitive edge if it wants to enter a new market and transform it, especially a traditional one as the financial sector. These features were highlighted by participants in this year's Fintech Summit in Sofia organized by Capital.
Nuvei Director Yuval Ziv, LogSentinel CEO Bozhidar Bozhanov, Symphopay CEO Daniel Nicolescu, and Hellas Direct co-founder Alexis Pantazis spoke about their main takeaways from heading a company introducing innovations in a traditional sector, as well as what the fintech industry should focus on in the future.
Pantazis, who is also executive director of Greek insurtech company Hellas Direct, told the audience why he decided to enter the conservative industry and attempted to change it.
We saw that Greece was ready to explode as a market in 2011-2012. Insurance was an obvious choice because the market is huge - both in Greece and around the world.
Co-Founder and Executive Director of Hellas Direct
He added that it was difficult to raise capital, in part because of the regulations for insurance companies.
"We had over 300 meetings in 11 countries until we got funding. Insurtech didn't sound sexy at the time, the term didn't even exist - you were either a tech company or an insurance company. It was hard to make a start, but once you managed, you had a lot of freedom. Within a few years, we were able to establish ourselves in the market and bring some innovative solutions. Most importantly, this is a market that goes unnoticed by big players and continues to be a fertile environment for new business models," Pantazis said.
Yuval Ziv of Montreal-based payment solutions provider Nuvei said that the outtake from years on the market is that there is a persisting hunger for new products and features. "When we listen to the merchants who work with us, we constantly get more and more requests for innovation. The most difficult thing today is the management of payments. Merchants need to make sure that payments are easy and secure, and that is our focus."
Ziv added that at least 10% of the company's funds go to the so-called Innovation Lab, where new solutions are developed.
We are constantly looking for opportunities for acquisitions and ways to give more value to customers. The lesson is this: stay focused on what your customers need.
Managing Director, Digital Payments at Nuvei
Customers want data
"Our customers want to have a lot of data to make a lot of decisions. The whole payment process is currently being optimized so that it can be used strategically by merchants. This also leads to a very strong loyalty between companies and customers," said Nicolescu, who is also co-founder of Bucharest-based Symphopay.
"Symphopay uses cloud technology that provides an all-in-one solution. The goal of any startup is to address a specific problem. If the problem is big, the solution will be very significant. If you focus on merchants, then payments should allow them to do more things and create loyalty between you, them, and their customers," he added.
Bozhidar Bozhanov from the Sofia-based cybersecurity firm LogSentinel said that the fintech sector relies on the introduction of new solutions but it should not save on cybersecurity costs and dealing with regulations.
Regulatory requirements may not apply to you and your company, but they certainly apply to banks. This is an important aspect.
Founder and CEO, LogSentinel
He added that there is a need for constant monitoring of the competition between business innovation and technological innovation, as well as for companies to be open to broad analysis when things are not going according to plan. "There are many things that can go wrong - from the idea, through the implementation, to the market. The important thing is to analyze and have specific measures to understand where potential problems are," Bozhanov added.
What big banks say
In general, most banks don't seem too threatened by the rapid rise of fintech solutions outside traditional financial institutions. But the industry is definitely paying attention.
We accept fintech companies as a source of inspiration rather than competition, as banks have significantly more capital and customers and are fully ensured in terms of security.
Head of Remote Service & Digital Channels of UniCredit Bulbank
"Certainly fintech companies can be partners and experience in recent years has shown that collaboration between the two parties is possible and brings benefits to both companies and customers. Fintech companies rely on fast and flexible solutions but banks can add to this the advantages they have built over the years - a huge customer base, stable infrastructure, and most of all customer trust," said Petia Dimitrova, CEO and chairperson of the Management Board at Postbank.
Jose Saloio, Manager of BNP Paribas Personal Finance in Bulgaria, sees collaboration between banks and fintech companies in two ways. Firstly, in automating routine tasks, and as a result - enabling people to focus on creating added value for customers and partners. Second, in providing data analysis, e-learning, artificial intelligence, statistics, to identify the individual needs of the client.
While Covid-19 put digitalization into hyperdrive, it wasn't something most industry players weren't already aware of.
"I know it may sound strange, but we haven't learned anything [from Covid-19] we didn't know before. It was clear to us that business was digitalizing, and that was a process we started five years ago. But if a year ago we thought it would be a marathon, now we are sprinting long distances," said Petr Baron, CEO of TBI Bank.