I recently joined Google Campus Madrid and now I am living in Madrid, Spain! Last week, I started a new project with Finnovista and got to connect with Franco Boggino, the events director. Today I will be interviewing Franco on the future of fintech in Spain.
Tell me about the fintech startups trend in Spain.
When we founded Finnovista in early 2013, there were only 50 Fintech startups in Spain and Fintech was mostly unknown and undiscovered to many people. There are a total of 208 Spanish Fintech startups by 2016. These 208 Fintech startups make Spain the largest market of Fintech innovation in Ibero-America, well above the 130 in Brazil.
These Fintech startups are competing for, over the next 5 years, 20% of the Spanish banking market, and they are doing it consistently with a significant presence in all financial service categories: Payments, Loans, Enterprise and Personal Finance Management, Insurance, Investment Management, Trading, and Savings.
How are fintech companies disrupting the Spanish financial sectors? What is the market position for fintech in Spain vs. Latin America?
Retail banking is the financial sector most under threat from the Spanish Fintech, with more of the 80% of the Fintech startups focused on B2C solutions, directly competing with commercial banks. Specifically, the Fintech segments that concentrate most activity, innovation, and dynamism in Spain are Payments & Remittances (24%), Lending (19%), Enterprise Financial Management (11%), Crowdfunding (10%), Personal Finance Management (10%) and Insurance (8%).
By comparing each of the Fintech segments in Spain we can notice the following trends. The Spanish Fintech leads in all the segments except in Financial Education & Saving, where Latin America is the leader. The Insurance segment (also known as InsurTech) represents 8% (20 startups) of the innovation in the sector, while in the rest of Ibero-America it does not exceed 5%, indicating the huge opportunity for InsurTech in the region. The opportunity for Spanish Fintech in Latin America is clear, as we can see in the position of leadership in innovation and extensive industry margins across the Atlantic. The first Spanish Fintech startups that have begun to explore opportunities in Latin America are Fintonic (PFM) and Aplazame (Lending).
In 2016, Spanish Fintech startups are already transforming from the outside the financial services industry, threatening the position of banks and insurers that have traditionally dominated this space, since they have not been able to take advantage of the clear opportunities provided by technology, mobile, and digital solutions, behavioral changes of the customer and the creation of new business models.
The Spanish Fintech is well positioned, given its leadership and growth in the last 3 years. The growth of Fintech in Spain is an opportunity for the whole country, not only offering innovative financial services that are more efficient and focused on the Spanish customer, but also as a source of growth for the industry in Spain, driven by the opportunity to export digital financial services.
At Finnovista, we are convinced that the time has come for the Spanish banks and insurers to recognize the great opportunity that the country and the financial services industry as a whole has through the development and promotion of Fintech, and to begin deploying collaborative innovation strategies with startups that connect and integrate them with the local and global Fintech ecosystem.
Tell me more about Finnovista.
Founded in 2012, Finnovista works with entrepreneurs and large corporates through collaborative activities such as conferences, acceleration, and scale-up programs, startup engagement programs, and innovation programs to drive their innovation journey and transformation. Finnovista has consolidated as the most active Fintech investor and one of the most relevant players in the startups ecosystem in Latin America.
Finnovista promotes FINNOSUMMIT, the leading conference in Fintech & Insurtech in Latin America, and develops Startupbootcamp acceleration and scale-up programs and corporate innovation programs for clients such as Visa, BBVA, HSBC, Scotiabank, and Fiinlab by Gentera. Finnovista is part of Rainmaking Group, a global leader in corporate innovation and venture development.