The irruption of fintech in the Spanish financial industry is a fact and its pulse to the traditional bank has begun, although the development is not being as fast as expected. In this incipient sector, yes, more than 5,000 people are already working and this is showing a real contribution to the economy, pointed out by the Spanish Association of ‘Fintech’ and ‘Insurtech’ (AEFI), the unofficial employers of the new companies dedicated to financing and providing insurance.
Technology, the common strength among startups
These companies base their strength precisely on the technology applied to offer answers to users of financial products. His arrival in this market has democratized in some way the way to access financial services and, at the same time, has opened new horizons. The idea is that before in a small town with a bank office all services were right in that branch. Now we can search through the internet and you can hire on the Net.
In Spain there are around 400 fintech, ‘the country with the highest number per inhabitant’, highlights the AEFI. A change that has caused a revolution in the banking ecosystem. But what is considered a fintech? According to the Spanish Banking Association (AEB), it would be «any company that applies technology for the provision of financial services, which is what banks have always done.
In the last five years, the figure of this type of companies has skyrocketed 53%, according to data from the consulting firm Finnovating. In addition, they have managed to raise one million euros or more in the funding rounds held only in 2018.
Changing relationships with the competitors
However, the relationship between traditional banking and fintech has gone through different phases. Initially, it was configured as direct competition, with the latter as a direct alternative to the provision of all types of banking services. Later it has been evolving towards a more cooperative model.
On the one hand, the fintech field provides innovative ideas, services created from the point of view of the user or use of technology “totally focused on consumer satisfaction,” adds Carrillo. Banking, on the other hand, can provide brand and recognition by the client, access to capital and financial strength that allows it to rapidly expand new products.
In Spain there are 400 fintech with more than 5,000 employees.
Also published on Medium.