Unchain Fintech Festival has collected data from top banking and fintech representatives for a market study called Fintech Under the Spotlight focused on the CEE region.
The research project gathers intel and crucial insights from top banking and fintech representatives regarding the current rate of innovation adoption in financial institutions, as well as key opinions on prioritising the integration of various aspects of fintech and current trends.
Key banking players and representatives of financial or regulatory institutions were invited to make their voices heard and participate in the survey. Some of the topics included are decentralised finance, payments in the context of fintech innovation, digital currencies and digital assets, cybersecurity in fintech and banking, current regtech trends, and the regulatory landscape, as well as fintech banking innovation.
Among the findings of the report:
DeFi is one of the most impactful changes that shaped financial ecosystems in the past years, opening new opportunities for banks and financial organisations. Among DeFi applications seen with great traction and the possible impact on the industry the study found: stablecoins, CBDCs (47%), web, metaverse (24%), NFTs and digital assets (12%), cross-chain DeFi technologies (4%), Decentralised Autonomous Organisations – DAOs (4%), gaming models on the blockchain (9%)
Payments - the good outcome of the two-pandemic years is the accelerated development happening in the payments sector, which now enables new and better contactless payments.
Central Bank Digital Currencies are gaining momentum in different countries that consider adopting them, but will it really bring a real disruption? Regarding the limits of CBDCs, respondents recognised: existing regulations and restrictions aimed at ensuring financial stability (39%), cumbersome cross-border payments from the perspective of technical interoperability and regulatory harmonisation (21%), offline capacity when not connected to the main telecommunications systems (18%), lawful right to anonymity or legitimate preference by certain segments of the public (16%), the potential rise of competition in a country’s payment sector (6%)
Cybersecurity - fast changes in a fast environment led to different challenges to protect the huge amount of data flowing between new disruptive solutions and legacy systems. In terms of regtech trends that enable organisations to get to market faster while ensuring regulatory compliance, the study mentioned replacing paper-based processes and streamlining data collection, access, and screening (29%), securing onboarding by leveraging AI and biometrics (22%), using automation technology in finding compliance gaps (20%)
Regulatory landscape - replacing the heavy processes from the past and improving how data is collected or processed in the industry is a top priority for regulatory compliance.
Banks have been pushing themselves out of their comfort zone for a while, adopting smarter credit cards, adopting neo banking, and working to integrate digital currencies into their system. Their current processes might be heavier due to the bureaucratic system they have been using, but there are ways to adapt. COVID-19 brought encouraged them to take the path of change, and adapt their products and services faster, as everything moved to the digital world. Regarding what business partner would a payment innovator look for in the next two years, many mentioned data analytics, machine learning solutions (26%), regtech solutions and KYC (2%), blockchain-related companies (12%), credit scoring, lending, financial marketplace platforms (6%).
To find out more you can download the report here.
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