The Financial Supervisory Commission of Poland has launched a program called Innovation Hub, which is dedicated to supporting the Polish sector of financial services in virtual reality – Fintechs. The economic environment has never been as advantageous for developing services of this type. The huge resources of IT companies, as well as Polish and European legislation initiatives, have resulted in a unique opportunity – will we exploit it? Robert Strzelecki, vice president of the TenderHut capital group, which creates innovative financial apps, will try to answer this question.
Relevant legislation, on both the national and European level, has impacted the development of the Fintech sector. That is why Poland has the opportunity to become one of the leading European Fintech centres. The government is currently working on a regulation package that will create the so-called “Sandbox” – where Fintech solutions can be implemented with both a higher security level for the client and a lower restrictive level for the startup.
Innovation Hub, which has just been launched by The Financial Supervisory Commission of Poland, is an introduction to further market regulations. Within the program, the Commission will establish dialogue with companies specializing in Fintech solutions, in order to jointly elaborate the legal regulations and control mechanisms for the entire industry. – Such initiatives and commitment of various groups of interest indicate that startups, which improve this branch of industry, will be established in Poland in the near future – predicts Strzelecki. The approach of the entire EU to this matter is also very important. The PSD2 directive, which will open access to bank databases for non-banking institutions (such as client information with the client’s consent), will enter into force in mid-January. From a Fintech developer’s point of view, this simplifies a lot of things thanks to the possibility of working on actual data and swiftly implementing innovative products that correspond to the changing needs of clients. – says Robert Strzelecki with enthusiasm.
Poland – the Fintech training ground of Europe
Modern banking services and solutions, starting from mobile apps, contactless payments or internet currency exchanges, where we can exchange our money, are becoming more and more popular. However, one should be aware that solutions that are common in Poland are not necessarily as common in other countries. – It’s true that Poland is a training ground for Fintechs, a so-called launchpad, where a lot of solutions and financial services are being tested. As an example, we can point out that, in their everyday shopping, Poles use the contactless payment method 20 times more often than German citizens. We became aware of this during the process of developing mobile banking apps for our clients from Great Britain and Latin America. When creating solutions, we were able to suggest certain solutions that work well in Poland but were not initially planned by our clients. This is because Poland has a relatively new IT infrastructure, we are a big market, and as a society, we like to test new solutions. Many solutions that have been tested in our country are transferred and implemented on other markets. Despite the fact that some technologies are implemented in foreign countries sooner, their mass usage takes place in Poland. And the number of innovative solutions is constantly growing – says Strzelecki.
What is Fintech?
At the beginning, every branch of industry is difficult to define. How does a company that specializes in developing software concerning modern financial services describe Fintechs? – It is a relatively new term that describes several kinds of services. Starting from the most well-known mobile banking apps. However that is not all. Applications that enable finance management, such as the British U Account, are becoming more and more popular. For the needs of our client, Ffrees Family Finance Ltd, who at the same time is the author of the entire U Account idea, we created a mobile version of the application. The mobile version of the app needed to be equipped with the same functionalities as the web U Account version. Functionalities are responsible for comprehensive control over the user’s budget, as well as for creating limited accounts for strictly determined purposes i.e. for paying bills, entertainment or an emergency reserve fund. The app makes it possible to access full information concerning expenses, their nature, as well as incomes and reports. In Poland, this is still a novelty. On the other hand, it is becoming a very popular solution in Great Britain.
Besides mobile apps, what other less obvious solutions can be considered Fintech products? Consulting and insurance solutions, which at the moment are less popular, can be listed here without a doubt. Virtual investment advisors, which are computer programs based on artificial intelligence, or Machine Learning Technology to be more precise, efficiently manage the client’s investment portfolio. This makes it possible to decrease service costs due to the fact that processes are performed by a machine, which also eliminates the risk of human error.
Biometrics are another solution that can be considered a fintech technology. This is still a novelty on our national market, however solutions based on biometrics are gaining popularity worldwide. For instance, we will soon be able to use biometric credit cards. Biometric security is considered to be the future of safe user recognition; fingerprint and retina scanning are just a few biometric protection methods – comments Robert Strzelecki. Poland is not only a testing ground for fintech software, but also the author and pioneer of financial technology solutions. – That is correct. We can honestly announce that our national solutions were successful. We are skilled in systems which intermediate or accelerate payments. A great example is the Eliksir system, which makes it possible to execute money transfers in real-time. We can also observe the rapid development of Polish currency exchange platforms or auction services such as Allegro or Cinkciarz.pl – explains Strzelecki. – These Polish achievements are not surprising, since we have such talented programmers – he adds.
The potential of Polish programmers
For years, Polish programmers have ranked among the global programming elite. We can point to international rankings such as the prestigious HackerRank as evidence. How is the potential of Programmers utilized in the financial services sector? – In order to develop the financial services sector, the appropriate resources are needed. There is a reason why Fintech development centers, such as London and Berlin, encourage programmers to work there by creating accelerating programs for startups from within the sector. However, startups are only a small element of the entire ecosystem. Polish IT companies easily adapt to international markets, implementing projects in this industry. We are appreciated for our creativity, reliability and professionalism – these are the opinions I receive every day when implementing Fintech solutions all over the world. Additionally, Polish programmers implement independent projects that may one day become worldwide solutions – he adds.
Scalability is key
The scalability capacity of the solution, meaning swift and simple adaptation of the solution on an international scale, is essential in every business based on IT technologies. – Scalability is one of the key issues that are considered by an investor when financing a startup – explains Strzelecki. – One such project is the so-called “umbrella team“, mentored by the TenderHut group. The team elaborated an app performance model, which is a two-way technology of direct mobile payments synchronized with a banking system. The idea is based on a free-of-charge payment utility for every smartphone owner and a bank account, even one where mobile services are not provided. This makes the designed technology scalable, because not every bank has its own mobile app, allowing the user to use their account from their smartphone. Additionally, the system makes it possible to collect payments for sold goods and services for a fee. Simple, intuitive use, without a complicated multi-level launch registration process, and compatibility with the current e-payment system are the qualities that guarantee a smooth start on the market. Compliance with Polish legal regulations and the possibility of adopting the solution within the entire EU is essential – adds Strzelecki.
The potential of Polish programmers, changes in legislation and Poles’ openness to innovation create a good background for developing this industry sector – summarizes Robert Strzelecki – vice-president of the TenderHut capital group, which develops software dedicated for the financial services sector.