Open Banking for businesses is coming in Central and Eastern Europe

What is the Romanian Fintech Association?

Romanian Fintech Association is the local association of all the companies that work to support the innovation of financial services with the help of technology. We aim to help the fintech ecosystem by providing our members access to markets, capital, and talent to enable the Romanian fintech companies to be competitive and nurture the progress of the financial sector.

Could you please tell us more about your experience and how does your professional background tie into the association’s story so far?

I used to work in banking. I started in banking as an entrepreneur and my first business was a franchised bank branch for ING Bank Romania, a company I started from scratch and successfully exited 2 years later, with 3000 customers – in 2007. After this experience, I went to work as a manager in different roles in financial institutions for several years (GE Capital, GarantiBank, Volksbank). During this period, I had commercial, risk management, and customer relationship managerial roles and had been exposed to a lot of angles on the banking ecosystem, including the experience of a global financial crisis. After this deep dive in banking and graduation from an Executive MBA programme, in 2013 I went back to the entrepreneurship arena. Started from scratch and exited some other businesses, including a reinsurance broker, and, in 2018, started Finqware, my biggest bet in business until now.

What is Finqware? How do you differentiate from Open Banking players like Plaid, SaltEdge, Tink, TrueLayer, etc.?

Finqware is an enterprise Open Banking platform. Our vision is to provide the most reliable Open Banking connectivity in the CEE countries and to become the preferred banking data hub for medium to large companies in this region. Our purpose is to put Open Banking at work and enable companies to take advantage of the tremendous benefits brought by the API technology, in terms of real-time, reach financial data.

Besides the geographical focus, we have three other main objectives that we follow closely when building our product:

• Deep coverage of the banked population;

• High quality, ultra-reliable connections;

• Enterprise-grade service and security of data.

Many see a great potential of Open Banking in consumer payments. How about corporate payments?

Enterprises and larger business usually do their payments within a monthly task routine and under very strict governance. Suppliers and contractors are paid within specific time windows each month, depending on the contractual agreements, invoice due dates, banks in which they hold their accounts, and availability of funds. The process of paying a list of invoices involves checking the invoices in a system, generating the payment orders lists through another system, adapting the format of the list for upload, uploading the lists in the banking apps, approving the payments, and processing them. The challenge of processing corporate payments relates to the multitude of orders that need to be approved and processed simultaneously as well as to the approval process, which needs to accommodate a segregation of duties.

In this respect, the PSD2 regulation is not very specific about the scenario of bulk payments with multiple signatures. Existing standards such as OB UK or Berlin Group provide guidance on how these should be supported by the bank APIs, though they are not compulsory from a regulatory point of view. However, many banks chose to expose this kind of service already and much more will do so in the future.

The result is a tremendous increase in the business customer experience. Currently, invoicing software or ERPs provide a lot of help in managing accounts payables, such as indicating suppliers, due dates, and invoices aging, but they could hardly facilitate the payment initiation. Through Open Banking APIs, it is now possible to send one or multiple payment orders, from your ERP, directly to your bank and approve them using the designated signatures and mandates.

Could you please describe the average Romanian consumer when it comes to payments and accessing banking products and services?

Romania has one of the lowest percentages of population access to banking services in the EU as well as one of the smallest adoption rates of digital banking channels. However, there’s huge growth potential, demonstrated by the speed of such rates increase during the pandemic period, when many people started using more online banking and getting rid of cash when paying for their groceries.

For example, recently large courier services have introduced card payments acceptance at delivery, to replace cash as well as facilitate more payment options for customers. There’s been an evolution from physical to digital, from cash to cards, and even to other online methods. People have been turning from physical shopping to online shopping and now they are more and more aware and trustful of the online payment methods when buying online.

Why should fintech investors come to Romania?

Because Romania has the fundamentals to produce important companies in the area. Given our communist heritage on performance in engineering, we have an important pool of software and technically talented people, with an R&D and innovation appetite. We also have a 19 million people market, with consumers eager to test new technologies and high broadband – this being the best set-up to sandbox fintech innovation, better than the conservative mindset driven markets in, let’s say Germany or Austria. Nevertheless, we have still the hunger to prove ourselves and to showcase that Central and Eastern Europe can produce surprises at the global level (see unicorns like UiPath or Payhawk).

What is on the Finqware agenda for 2022?

First and foremost, we will get very soon the EU wide Open Banking license (we are in the last stages of getting the TPP authorisation, for both Account Information Services and Payment Initiation Services). Immediately after this event, we are ready to deploy our commercial strategy for 2022, since we want to move from our current technical service provider status to launching our products. Based on this licence, we are prepared to immediately go live with AISP services in Romania and Croatia. By the end of the year, we will ensure full CEE coverage for AISP services and will start also offering Payment Initiation Services (we already offer it to some banks as a technical service provider).

About Cosmin Cosma

Cosmin Cosma is Co-Founder and CEO of Finqware, a European fintech startup managed from Bucharest. Before founding Finqware, Cosmin had management positions in banking institutions such as ING Bank, GE Capital, Garantibank, and Volksbank, in commercial and risk management roles. As a serial entrepreneur, he has started several companies, including a banking franchisee branch for ING Bank and a reinsurance broker, both still active companies, although Cosmin exited several years ago after setting them up for success.

Cosmin has an Executive MBA diploma and currently acts as President of the Board in the Romanian Fintech Association.

About Finqware

Finqware has already been recognised for its potential to become a CEE regional leader in the fintech industry in several global reports and it is renowned for being the first technology company to enable Open Banking data pulling in real-life production in Croatia and Romania while partnering with leading banking institutions in the region (Banca Transilvania, CEC Bank, OTP Bank, and Alpha Bank- naming some of their partners). The company is already backed up by important regional institutional investors like Elevator Ventures (the CVC arm of Raiffeisen Bank International) and Gapminder VC (EIF backed fund) and was awarded several international recognitions: Seal of Excellence from European Commission, Great Prize by Citibank at Citi PSD2 Regional Challenge, Local Hero at Elevator Lab, and more others.