Why Foreign Investors Are Interested in Spanish Fintech Companies

Spain is the third country in Europe in terms of the number of fintech companies. According to data from the ‘FinTech global vision 2023’ study , prepared by Finnovating, in Spain there are 977 active fintech companies, which places teh country only behind the United Kingdom (2,439) and practically on par with Germany (978).

And if we look at the rest of the world, there’s only the United States (5,730), India (1,512) and Canada (1,376) ahead.

The power of this ecosystem is awakening the interest of foreign investors, who come to Spanish fintech companies attracted by factors such as their innovative capacity, regulatory convergence and the solidity of the national financial system, according to the Spanish FinTech and InsurTech Association AEFI.)

“The fintech ecosystem of Spain has a growing relevance that has allowed many companies to attract attention in other markets, promoting the development of alliances with international companies to replicate disruptive models that have their origin in Spain, taking into account demanding regulation. and the difficulties in accessing financing,” detailed the association.

Innovation capacity of the Spanish fintech sector

“One of the main levers of attraction for Spanish FinTech companies is their capacity for innovation. These companies have stood out for their ability to develop disruptive financial solutions that address the emerging needs of consumers and other businesses. Along these lines, the adoption of technologies such as Artificial Intelligence, blockchain and data analysis are pushing Spanish FinTech companies to offer innovative, efficient and user-oriented products and services,” specifies AEFI.

“The continuous improvement of research has also been essential to maintain this competitive advantage, since Spanish fintech companies, despite the difficulties in finding financing, have established solid collaborations with universities, the traditional financial sector, research centers and technology companies, which which has facilitated the transfer of knowledge and the creation of pioneering solutions at an international level,” he adds.

Regulatory convergence

The association highlights the importance that this aspect has had in increasing the attractiveness of Spanish FinTech companies abroad.

“In recent years, Spain has implemented regulatory measures sheltered from community regulation that encourage innovation in the financial sector, while guaranteeing consumer protection and the stability of the system. Without a doubt, the launch of the ‘Sandbox’ marked a turning point, becoming one of the most ambitious controlled testing spaces on the continent, to identify innovative projects that improve the provision of financial services, with clear and efficient supervision protocols. equal treatment for all entities,” he points out.

In addition, it emphasizes that Spain has other regulations that promote innovation and entrepreneurship. “Good examples are the Startup Law, due to the tax benefits it contemplates and the creation of a vital space for public-private collaboration, such as the National Forum of Emerging Companies, which is a good instrument to gain agility and optimize the allocation of resources that makes fintech companies competitive globally; and the Create and Grow Law , which focuses on digitalization and provides entrepreneurs with some appropriate tools to shorten the time necessary to start a company,” he specified.

Strength of the Spanish financial system

AEFI points out that the strength of the Spanish financial system has a positive impact on the attractiveness of national fintech companies. “Spain has one of the most solid and stable systems in the world, as well as professional expertise superior to that of other neighboring countries. This stability provides a safe and reliable environment for investment and innovation, which in turn attracts both domestic and international investors and entrepreneurs.”

The 2008 financial crisis served to accelerate reforms in the Spanish banking sector. “Since then, measures have been implemented to strengthen banking regulation and supervision, reduce toxic assets and improve transparency and corporate governance. These reforms have reinforced confidence in the Spanish financial system, which has also opened its arms to the development of strategic alliances with fintech companies to develop disruptive models that solve new needs for consumers and companies,” says the association.

National talent

Although talent is always a scarce commodity, AEFI considers that our country stands out in this aspect, “which has allowed us to lead disruptive initiatives worldwide in the field of financial innovation.”

“There are qualified professionals in areas related to the financial, insurance, legal, engineering or data analysis fields , which makes Spain one of the most likely markets to develop finTech initiatives , which explains why it is one of the countries with the greatest number of startups . However, the difficulties in raising funds and investments that develop projects can make it difficult to attract and retain that talent, which requires competitive salaries, in line with the value that these professionals provide,” he explains.

Bridge between Europe, Latin America and Africa

“Spain has good business and business connections that position it as a gateway to the European continent for projects from different countries in Latin America and North Africa, and as a launcher for European projects to those countries, as well as an enviable network. telecommunications, good internal mobility infrastructure and with the European Union ,” highlights the association.

All of this adds up to “a climate and way of life that increases the interest of companies and investors in forging alliances with companies of Spanish origin or even establishing innovation hubs , as is happening with Malaga and, therefore, attracting foreign talent and capital.” , as well as promoting innovation and the development of new ideas within the ecosystem,” he adds.

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(Featured image by rperucho via Pixabay)

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

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