The financial industry in Japan is primarily oriented by mega-banks, and as a result of historical lessons learned, the government does not provide top-down instructions. Instead, various policies are introduced on a bottom-up basis and through a best effort approach. Therefore, initiatives like Open Banking, for example, are not mandatory for banks, which hinders their implementation and utilisation progress.
Other trends at the subsector level include the government's increasing focus on the digital asset and web3 domains, as well as ongoing discussions regarding the establishment of cross-border payment infrastructure in response to other initiatives in the region (UPI-PayNow integration etc.).
As for our association, we are organising an East Asian multilateral fintech alliance with Korea, Taiwan, Hong Kong, and Mongolia (Mainland China will join us soon).
In addition to influencing policy direction through recommendations to the government, we are also actively involved in regulatory processes, such as submitting public comments during law revision periods.
We formed a study group focused on web3 and blockchain with member companies that are engaging in crypto and blockchain-related businesses. This group facilitates discussions and promotes knowledge sharing among the members.
There are various industry associations, such as the Japan Blockchain Association (JBA), Japan Cryptoasset Business Association (JCBA), and the self-regulatory body for crypto exchanges called Japan Virtual and Crypto assets Exchange Association (JVCEA) in Japan, and we are closely collaborating with these organisations in ecosystem building.
As Takeshi was mentioning it for Japan, since Covid, we have seen a big boom in the digitalisation of finance, especially in the payment sector.
What is really exciting in our market is the speed at which finance is appearing everywhere, and how our environment is shaping the service.
Just think of the shared economy, sustainability/climate change, the regulatory and technological advancements, and also the focus on giving more power and comfort back to the customer, it gives you a great landscape of opportunities and changes.
In 2035, Brussels plans to ban all combustion engines from driving into the city, with the shared charging stations, we can literally see payment solutions popping out of pavements a bit everywhere in town.
Because of the strong competition in the market resulting in a high customer acquisition cost, a lot of fintechs are pivoting their business model from B2C to B2B with white labelling, Open Banking/Open Finance, and products such as BaaS, we can see interesting cases of embedded finance solutions like loans, micro-credits, in-instalments, BNPL appear more and more.
Moreover, smart insurance is exploding. If you rent a car or a scooter for three minutes, you are insured for those three minutes. If you become a Deliveroo rider for certain nights, or travel abroad with your Revolut app, you just press a little button to be insured, and our great insurtech Qover covers you until you press that button back again, by cleverly repackaging the best insurance solution for your needs.
We, at Fintech Belgium, support our members by:
promoting them and their services in the FS but also other industries;
representing them towards the Belgian regulators and European policy maker thanks to the European Digital Finance Association to bring awareness about the market trends and the needs for clear and innovation-catalyser regulation.
In this way, the main challenge that the fintech sector will face, principally in a country as Spain in which big financial corporates are present, is the ability to accommodate these technologies both through internal developed projects, as well as through relevant collaboration with external players who, in some cases, will provide the access to all these technologies in a more agile, optimised, and cheap way. It is here, at this point, where collaboration with startups appears as a process to consider, since which, over time, they have specialised in each of the existing processes of the financial sector value chain, providing differential services that, besides, are now relatively easy to integrate.
That is why the open innovation departments of the main fintech corporates are currently gaining more and more importance at the organisation level, since, although they are not currently directly generating profits, they are acting as such by bringing all these technologies closer to the main business units, so that they can use them in the most agile way possible to generate said benefits in the short/medium term. In fact, this is leading the strategies of the M&A departments of said organisations to become more and more involved on all these previously mentioned processes related to the investment and even acquisition of startups (and their technologies), for a simple matter of generating MOAT with respect to the competence.
Considering what has been said above and applying it to the Spanish market, we can say that Spain is a country that, at a financial level, has great potential within Europe. This is mainly due to the relevant economic weight that this industry currently has (since it counts with both large companies and relevant players within the fintech sector) and the so-called effect that this casuistry generates with respect to the appearance of auxiliary and complementary services, most of which are related to the implementation of technology in said industry.
Banks are really awesomely digitalised in Spain. Most of the big banks are also promoting these processes where they operate, especially in LATAM. The current situation in Spain is inspired on AI and Huge Data Management, but also, from the operative point of view, on the creation of big companies operation on biometrics or cybersecurity, for example, which has a big impact on the fintech industry.
If we would have to define the future of fintech in connection with the potential evolution of the ecosystem, I would underline the following:
More banks will offer integrated solutions.
Growth of embedded finance.
Fintech will focus on marketing themselves as data organisations.
Great growth trajectory of ESG-fintech startups.
Consolidation of payments and Crypto assets.
AI will drive great value creation.
The blockchain will change established financial protocols – creating a new era of trust in finance.
Takeshi Kito, Alessandra Guion, and Francisco Estevan will be present at UNCHAIN Fintech Festival, an event that aims to foster connectivity and enhance the visibility and accessibility of the Central and Eastern Europe (CEE) fintech ecosystem to the global market. It brings together key stakeholders from the financial services, banking, regulatory, tech, investor, and fintech startup sectors across the CEE region.
The festival provides a platform for in-depth discussions on the latest developments in the field and facilitates knowledge sharing and collaboration to support fintech innovation. With over five financial institutions and central banks participating from countries like Bulgaria, Romania, Hungary, Croatia, and Poland, attendees gain valuable insights into implementation strategies and advancements in the fintech space.
About Takeshi Kito
Takeshi is a Fintech entrepreneur, and Vice chair of Fintech Association of Japan and leads international partnerships. Aside from those activities, he sits on a committee for the Government of Japan’s Regulatory Sandbox and an experts group of the Ministry of Economy, Trade and Industry for cross-border transfers of data. Prior to establishing his own startup, he worked for Merrill Lynch as an investment banker and has 12 years experience in capital markets in total. Before joining Merrill Lynch, he worked at Boston Consulting Group.
About Alessandra Guion
About Francisco Estevan
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