There’s no denying that a revolution in banking is well on its way but how fast can we expect results? Experts claim that banks, as we know them today, will be just a fading memory in the next 50–100 years. Can you imagine a bank without branch offices, where you can log in at your convenience — night or day — and anyone can get a loan, regardless of their credit history? That sounds improbable, to say the least. And yet…
“Branch offices will not disappear, mind you; they will only change their role,” explains Brunon Bartkiewicz, Chairman of the Board at ING Bank Śląski. “New technologies will leave employees more time to talk with the customers. Currently every action we take works towards digitalisation and developing new technologies, and banks are trying to outdo each other in delivering innovative digital solutions to their customers. But that’s not where the main challenge lies. The trick is to offer products and services customers actually want to use. Technology brings power over their finances back to the client. It also changes the relationship between them and the bank, because a digital customer is an informed customer. Therefore the bank has to do everything in its power to meet their needs.”
But the concept of banking 4.0. — or rather financing 4.0 — is not just making new apps and calling it a day; its ultimate goals are to be available to everyone and to move all the services to the online world. Thus, no matter if you need a new credit card or you’re applying for a loan, all you’ll need is your smartphone. In a way, it’s all thanks to the 2007 financial crisis, which caused the big, “unsinkable” players to fall. This gap in the market was quickly filled by small fintech enterprises.
One of the core values of this new form of banking is democracy. While before big banks could decline your credit application, now — thanks to new technologies — more and more independent money lending services are available, which will give you a loan without checking your credit history. They’re called microfinance or social lending (P2P lending). Examples of such companies are Kreditech or LendUp.
Another branch of fintechs focuses on promoting financial responsibility. They provide machine-learning based services which advise you when to retire or buy a flat or even create full behavioural profiles assessing if a customer will be able to pay off your loan on time (LenddoEFL).
How will the big change come about then? According to experts, despite the fact that the US is still the leader of the fintech market, it’s China who will eventually lead the way. Even now, a staggering 96% of e-commerce transactions are conducted without involving banks. The P2P lending market in China is worth $66B, while in the US it’s “only” $16B. Also, the Chinese fintech startup ecosystem mostly focused on e-commerce, is currently the most dynamic in the world. You’ve probably heard of Ant Financial, a company that manages transactions on the Alibaba platform; its market value now reaches $60M! Apart from that they also have the world’s largest MMF, Yu’e Bao, and a credit comparison platform.
Where’s Poland in all that? Actually, we’re doing really well! The fintech industry, currently worth $4M, is the most innovative in the CEE region. A lot of the players on this market are banks, which invest more and more money in new technologies each year. Still, in the era of extremely low saving rates, fintechs present really competitive offers, such as cheaper and more effective money transfers (Azimo), a blockchain-based money handling service (Billon), or a new identification method (VoicePIN). Last year, Polish moneylender Creamfinance was included on KMPG and H2 Venture’s list of the most promising fintechs in the world.
While we’re no giant like the USA or China, we certainly prove that there’s a huge potential in Polish enterprises.
