Digitization of financial services gives wings to fintech companies to reinvent the industry

The accelerated digitization of financial services in the wake of the pandemic has opened up a scenario of great opportunities for fintech companies, which are revolutionizing the world of finance thanks to technology. Their disruptive projects have been boosted by the growing adoption of technology by many users, who are increasingly inclined to use solutions such as financial applications and digital payments, among others.

As a portrait of this ecosystem, Foro Ecofin has once again named the ten best fintech companies of the moment. In the sixth edition of its TopTen FinTech 2021, the selection that recognizes the most outstanding financial startups of the year for their contribution to boosting the sector, the following companies have been chosen: Aplazame, BilliB, Bnext, Finizens, Imagin, October, Pleo, Qonto, SeniorsLeading, and Woonivers.

The composition of this shortlist was announced a few weeks ago at an event in Madrid attended by Carlos San Basilio, Secretary-General of the Treasury and International Finance. Subsequently, some of the founders and managers of these emerging companies met at an observatory organized by Expansion and Foro Ecofin.

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Fintech companies rely on innovation to reinvent the sector

“The TopTen FinTech 2021 brings together a select group of entities that represent the hybridization and collaboration of the fintech ecosystem: there are entities originating in the start-up entrepreneurial world alongside others born in banks or multinational technology companies, as well as niche solutions and others that are universal marketplaces,” explained Salvador Molina, president of Foro Ecofin. He also highlighted the international vocation of all the projects: most of them are pan-European and some have a presence in America.

These businesses share their digital stamp and rely on innovation to reinvent the sector. Benjami Puigdevall, CEO of Imagin, commented that “finance does not have to be at the heart of people’s lives: we prefer to focus on activities where there is enjoyment and not a need.” The fintech company, which emerged as a mobile banking app within CaixaBank, decided to turn its model around in mid-2020 by attracting 400,000 new users. Now, “it is a lifestyle platform and the banking proposal has shifted to respond to services such as gaming, music and other hobbies of young people,” said Puigdevall.

Woonivers, founded in Madrid in 2018, is a platform focused on streamlining the VAT refund process for non-EU tourists. Affected by the restrictions on mobility in the last year, “it is a business that has to do with the fiscal areas and the taxes that correspond to each one,” commented Antonio Cantalapiedra, co-CEO and co-founder of the startup. The head of Woonivers pointed out that it has become SaaS and has reached an agreement with Visa to launch the first digital card that allows tax free management in full.

Qonto is a neobank aimed at SMEs, entrepreneurs and the self-employed. Of French origin, it landed in Spain in 2019 – last year it managed to multiply by six its turnover in the national territory – and is a European leader in the corporate segment. “We distinguish ourselves by offering a friendlier and simpler user experience for the entrepreneur, a 100% online customer service and a very transparent price with a monthly subscription model,” said Carles Marcos, director of Qonto in Spain.

Investment is not left out of the fintech universe, as demonstrated by the case of Finizens, a company born with the intention of democratizing private banking. “We offer a unique experience in savings, investment and pensions based on low commissions, profitability and minimum volatility. By indexing certain economies and assets, we manage to beat 95% of active managers in Europe,” said Felipe Moreno, business director of Finizens, which uses funds from managers such as Vanguard, Amundi and BlackRock. Moreno stressed that “it is not a margin business, but a volume and permanence business.”

The main challenges faced by the Spanish fintech sector

Among the main challenges pending in Spain, the leaders agreed on the need to develop a solid ecosystem supported by legislation and capable of attracting investment. “We need to eliminate bureaucratic obstacles to create companies in Spain, and it is essential to streamline mechanisms such as stock options, which would allow us to attract more talent from abroad,” said Carles Marcos.

The launch of the sandbox in 2020, which has finally seen the light of day after years of waiting, is one of the main advances to boost innovation. The first call for projects and applications to be part of this testing ground ended in March. “Spain needs a cultural sandbox and a plan as a country: a climate of transformation must be fostered from the educational sphere,” considered Antonio Cantalapiedra.

In parallel, Benjami Puigdevall asserted that “we are facing a new paradigm where monetization formulas and the relationship with the client are changing. In this scenario, alliances and collaboration between the fintech world and the banking sector will play a key role”.

As highlighted during the meeting, another project that aims to attract technology companies in the financial sector is Madrid Capital Fintech (MAD FinTech), the largest fintech cluster in Spain, which is already more than a year old and aims to turn the capital into a pole of attraction for these companies.

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(Featured image by c1n3ma via Pixabay)

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First published in Expansion, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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