B r a t i s l a v a (21. 11. 2019) – For the third consecutive year, the last weekend of September in Bratislava belonged to an innovative event called Fintechsummit, whose organizers, in cooperation with prestigious guests, together open the most blistering topics not only in the field of banking or insurance. The topics discussed during the main conference also touch upon the future of cryptocurrency or the generation of millennials, whose understanding of the world of finance is part of our future as well. In addition to the theoretically oriented conference, the Fintech festival also included the Hackathon competition, which besides the winning, also brings the opportunity to cooperate with the most innovative bank in Slovakia. This year’s news of the conference was also the October Side Event, which touched on topics focused on the financial technologies of the future.
The Fintechsummit conference was held in Bratislava for the third time. It took place for the third consecutive year with the participation of the Embassy of the United Kingdom and Northern Ireland, which has supported this event since its beginning. „The United Kingdom is the global leader in FinTech services. London has even overtaken New York itself. The United Kingdom can therefore also be a source of Fintech inspiration for the region of Central and Eastern Europe, where many of the countries have huge potential in the form of great and talented young people who need to be given the opportunity to show their talent,“ mentioned in the speech of the British ambassador to Slovakia, Andrew Garth.
Fintechsummit’s innovative and inspiring debates were divided into two streams – Banking and Insurance, and this year over 900 direct visitors and online followers listened to them. Compared to last year, the organizers of the conference achieved a really great attendance. Registration of those interested in non-traditional and progressive topics increased by 168% compared to last year. However, not only the number of participants increases every year, but the quality of their knowledge and experience does as well. This year, for example, world-famous names appeared for the first time at the conference, such as Sara Koslinska, one of the Top Worldwide 30 under 30 of magazine Forbes. This year, however, was record-breaking in several areas – the number of registered participants occupying the highest posts in the society has increased. Compared to the previous year, almost 15% of participants attended with one in seven in leadership positions in the management or management of a company or bank. Fintechsummit is a great opportunity to make new networking contacts – more than 100 B2B meetings were held this year and conference participants asked 78% more thematic questions compared to last year. 44% of participants has a background in the financial sector, a significant increase compared to last year. Fintechsummit’s Banking Stream has earned a reputation in the past, as demonstrated by this year’s active participation of 10 banks.
The information importance of the conference is really strong. The discussions and innovative presentations provide useful information not only to the professional but also to the general public. „Fintechsummit is a great platform to connect fintech services, startups, government and banks that have not yet given up in this digital world,“ about the importance of the conference, Peter Matúš, Board Member for Retail Banking at Tatra banka, a.s. The conference brought the opportunity to learn about how banks are trying to keep up with the times and to adapt to market digitization literally by a mile step. „Banks open new positions that focus exclusively on exploring user experience (UX). Consideration is also given to moving from traditional brick-and-mortar branches to digital branches, where employees only act as technology support and do not manage active operations. However, only the behavior and preferences of customers will show what kind of change to expect in the future,“ explained by Barbora Ruščin, Head of UX/UI experience v Tatra banka, a.s.
Digitalization and new technologies often raise concerns about of the general population, to what extent they are beneficial and when they are becoming threats to the world of finance. In the discussion on the complete digitalization of banks, different views were expressed, but all participants agreed that while the danger is growing, new technologies are also a great opportunity to streamline services in the financial world. In his case study, Peter Alexanderson of Sweden even shared the view that digital services can also be outsourced, but there is no need to put cyber protection to third parties – especially outside companies. Peter Pénzeš from NBS, which operates as a regulator on the Slovak market, mentioned the activity of Innovation Hub, NBS project, which has been on the market for only 6 months, but has an irreplaceable role in identifying real needs and experience.
The second stream of Fintechsummit was the insurance industry, which is referred to in the CEE region as a slow-down industry that fell asleep. Insuretech incorporates constantly changing technologies that turn the insurance industry into a dynamic industry, but in our region it does not receive much attention on all fronts. The revolution in the insurance industry is a current trend and the sooner we start to address it, the sooner we can jump on the progressive wave and focus on artificial intelligence, which many experts believe is the future of the insurance industry.
It is the Fintechsummit that brings an innovative insight into what is happening in the industry, giving a comprehensive view to all participants – it was a surprising discovery that customers were also willing to share their personal information if they could get smarter and cheaper insurance. Players in the insurance market are not only established companies, considered bards of this market, which have archives of client information, but also smaller start ups, which in turn know what to do with this data. The ideal solution for the market would be their symbiosis – but what really will happen with them will be known in the next edition of Fintechsummit, which will be held in September next year.
Slovakia is full of young clever designers waiting for the right moment to come up with revolutionary solutions. That’s why Fintechsummit also included a competition that is a perfect example of connecting young talented and innovative designers with clients. The main partner, Tatra banka, a.s., has provided the unique Hackathon with the main prize of € 5,000 this year as well– the assignment was Digital Investing via Mobile Application. 5 Slovak teams and one with their Hungarian colleagues again proved that not only in Slovakia, but in the whole CEE region there are talented young people who excel not only in design but also in creativity.
The ever-growing interest in Fintech and Insurtech topics should lead to the establishment of a single platform called Fintech & Insurtech Association of Slovakia (FIAS), in which a lot of key stakeholders have shown an interest during the main conference. The Association should serve its members to exchange useful knowledge, share videos and communicate with each other. It will integrate modern technologies in finance, banking and insurance in one place, thus enabling their development and further improvement not only by its members but also by the wider public.
The conference was organized by the Slovak company Future Proof, whose CEO Davy Čajko said at the end: „Again this year, responses from participants and speakers around the world have confirmed that our goal and vision, which we set ourselves three years ago, is fulfilling. Slovakia is a full member in the world of financial innovation thanks to its strategic location and is attractive to partners from around the world. For several years we have been progressively mapping and building this special ecosystem from scratch, creating our own bold projects and we feel that the time to take the next step has come. Establish an official institution that will create an opportunity for Slovakia to present itself as an innovative region; that will create legislative proposals, bring together all relevant decision-makers and much more. We have the ability to become leaders in the Fintech and Insuretech areas. That is exactly what the Fintech & Insurtech Association will be like.“
However, the list of quality events did not end with Fintechsummit. On October 22, a Side event took place in Bratislava, the aim of which was to open up topics such as Green Banking or the New Generation of Capital Markets, to the general public. The organizers also wanted to open the topic of establishing the Central European Digital Exchange, which the industry leaders discussed. The participants included representatives of banks and consulting companies, but also the participation of the European Commission or the Bratislava Stock Exchange, the National Bank of Slovakia and the Ministry of Finance of the Slovak Republic. The international participation of speakers from the Netherlands and Austria and domestic experts aimed to turn the participants’ attention in the right direction and thus to convince them to actively cooperate, which would result in the preparatory phase of the foundation of the Association. The side event was also the place where the goals and mission of the newly formed Association were presented.
The side event of Fintechsummit opened up burning topics that have been discussed abroad for quite a long time and are beginning to find their way into our region as well. One of its topics was green financing, which should respect not only environmental but also social sustainability aspects. Lívia Vašáková, Head of the Economic Analysis Section at the European Commission Representation in Bratislava, assessed the state of green financing from the European level perspective: „The European Commission has already adopted a number of measures to achieve climate balance. Providing funding for low-carbon resources – something that will become increasingly important in the near future. According to the Action Plan adopted by 2030, the amount of sustainable funding should be 180 million euro annually and should come from public sources, but also from private money. The European Investment Bank aims to increase the amount of money that will be directed towards a sustainable economy.“
Green financing is a term that we have encountered so far in relation to foreign countries rather than in connection with Slovakia. We do not feel its strong support here yet. However, as a country, we have followed up the individual steps planned under the European concept. So far, the Action Plan for Sustainable Finances has been reflected in the form of legislative proposals and discussions with bank representatives and investors, which should lead to accelerated implementation of green financing also on the Slovak financial market. „In connection with green financing, however, we also encounter so-called greenmotion effect based on the idea that even green funding does not have to explicitly help the environment. Therefore, when this form of financing becomes part of our market, many institutions will have to take a responsible approach to assessing the extent to which individual green funding instruments and products can affect our environment. A taxonomy that identifies sectors suitable for green financing should help in this regard,“ stated by Lucia Kopiarová, expert on sustainable finance from the Ministry of Finance of the Slovak Republic.
However, green thinking is also reflected in the relationship between financial sector institutions and their clients. A positive example in this respect is 365.bank, the only bank in Slovakia whose only distribution channel is a mobile application. „When providing banking services we apply the principle of paperless and green banking. In practice, this means that the client opens a bank account without signing any paper. We are currently approaching the 20,000 clients that are actively using our services, demonstrating that such access is not an obstacle and clients identify with it without any difficulty,“ the philosophy of providing banking services explained by Klaudia Drábiková, First Deputy CEO of 365.bank. The Bank applies an unconventional approach also in the case of their coworking project for the lease of premises in Banská Bystrica, which expands their education beyond the provision of banking services. Everyone interested in renting must be trained in ZERO waste and ECO friendly principles in order to eliminate waste generation.
Building the principle of green banking is not so easy in the case of traditional banking houses, which have been operating on the Slovak market for several years or even decades. They have clients in their portfolio who do not know the online space and do not use electronic communication, since a few years ago, the Internet coverage was not on the same level as today. „The range of our clients’ age ranges from 0 to 100 years. And while we try to maximize paper elimination, for example by calling for electronic communications, it is understandable that not everyone will use it, as many still do not even have email addresses. However, complications also occur at the product level, for example in lending. It is here that printed documents are compulsorily handed over to clients, according to the regulations of the European Union and the National Bank of Slovakia,“ barriers to green banking explained by Miloš Blanárik, Adviser to the Board of Directors of Prvá stavebná sporiteľňa.
One of the main prerequisites for the correct implementation of green financing and its subsequent use in practice is the formulation of good policy frameworks, but Slovakia is not sufficiently active in this aspect. „The problem with Slovakia is that Slovak politicians often do not understand what politics at European level is about. We lack the commitment that great European players like the Netherlands and Germany have. They are bringing their own problems to the European level so that Europe can help them solve them, and also provide them with public resources. We can get much more from the community of European states than we have, and this is not just about finance. However, it is all about our skill, because Europe alone will not help us,“ stated by Daniel Acs from the interest association Bioeconomy Cluster.
The ideal use of green funding should be to support projects based on environmental principles. A nice example was given by Daniel Acs, according to whom banks are the institutions that can support environmentally important projects and thus fulfill the idea of green financing: „There are many creative entrepreneurs living in Slovakia, but the system does not allow them to use their potential. One solution could be a product combining a bank loan and a grant. This would be used to finance bio-economic projects whose sustainability would be assessed by the bank itself. This is the only way to prevent the corruption associated with Slovakia, for example with subsidies.“
The second part of the Side event was devoted to the new generation of the capital market, which is reflected mainly in the constantly expanding digitalization. Among its most important benefits in the area of financial market and its security can be included especially better access to information, which brings people much wider possibilities today than in the past. Thanks to the availability of information we have the opportunity to invest not only in real estate, stock exchange, but also in various innovative inventions or startups, which allows us to diversify investment risk. Digitization is also evident in the case of automatically managed investment funds, which allow ordinary customers to invest as well. Last but not least, it is also important in the use of virtual space, thanks to which we can now equip most things from the comfort of our home.
Despite all the benefits of digitalization in the capital market, we also encounter some obstacles. „The benefits of digital market digitalization can be particularly appreciated by younger generations. However, there are still some clients of companies operating on the financial market who do not trust the new technologies at all. They think that a regulated system that had operated in the past on the capital market was safer and more profitable. The greatest challenge, therefore, is to combine these two worlds into one functional whole that will not contradict each other,“ said Juraj Forgács, founder of the company Fumbi.Network.
Today, the benefits of digitalization are already being used not only by America, but also by the entire Western world. Nevertheless, Slovakia is still among the countries that more or less resist them. „Our approach to the use of digitalization and its subconscious refusal to use it also during our everyday life stems from our past. The inclusion of Slovakia in the Eastern Bloc did not only result in a slowdown in our economy. At the same time, a conservative approach has taken grown in us, which now prevents us from making even slightly risky decisions,“ evaluation of the investment behavior of the Slovaks by Ján Foltán, Director of the Capital Market and Insurance Department at the Ministry of Finance of the Slovak Republic. His opinion was also supported by Daniel Gašpar, Managing Partner of Crowdberry, according to which Slovaks need enough ambitions to make more risky decisions within the financial sector.
According to Tomáš Ambro, Head of the Securities Market Regulation and Pension Savings Department at the National Bank of Slovakia, Slovaks also lack long-term investment capability. They prefer to put their money in less risky funds just to make sure they can get to their money easier. The result of this is the fact that most Slovaks still have their funds deposited in bond funds and not in the progressive funds of the second pillar.
However, a new generation of investors is starting to form in Slovakia, which is more than risk-friendly. „This generation of investors is the exact opposite of the classic Slovak with conservative behavior. These investors seek the excitement of a risky investment linked to a high-profit vision. They do not have a problem to invest in more risky forms such as startups, science or cryptocurrency,“ new generation of Slovak investors explained by Ras Vasilisin, founder and general director of Virtuse exchange.
The introduction of modern technologies into the financial market processes is of great importance in order to save time and increase comfort not only for the client but also for the financial institution providing the services.
„In order to support innovation in the FinTech and InsurTech sectors in Slovakia, it is necessary to update the so-called. KYC regulation (know your customer). Banks and non-bank financial institutions could, therefore, use modern technologies such as 3D face scan to meet clients’ requirements, which would significantly speed up the service delivery process. However, digitization and new technologies should also be of benefit to financial institutions. The result should be a simplified and, in particular, more transparent process of applying for a payment institution or electronic money license, while also speeding up the approval process,“ about the benefits of introducing new technologies, Kenneth Kumor, director of DLT software Slovakia, who, in addition to the above-mentioned recommendations, also proposes the construction of a technology infrastructure for instant SEPA payments according to the “CENTROlink” model operated by the Lithuanian Central Bank, and enable non-bank financial institutions and FinTech companies to directly connect to the SEPA system through the National Bank of Slovakia, without the need to use the infrastructure of commercial banks. That is why I welcome and become a member of Fintech & Insurtech Association, which also aims to open these questions.
You can see our Fintech & Insurtech Magazine here: http://bit.ly/37tH5p9
The financial sector is one of the most dynamic sectors. That’s why the October Side Event and the September Fintechsummit Conference were important events in the world of finance. In addition to the current state of affairs, individual experts and speakers also looked at the prospects that we are most likely to expect in the future. Not only the guests, but also the general public took a lot of useful information from this event. All information about the last year of Fintechsummit can be found at https://fintechsummit.sk/2019/.