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The financial sector also gets on the boat of new technologies and, in addition, in Spain does it in a big way. Fintech companies, although recently created, show spectacular growth figures. Let us study its current situation, its promising future and we will see why the electronic signature is key to its success.
Little by little, digitization is reaching even the daily activities. Until not too long ago, to perform any financial operation we had to move to our bank office and wait patiently for our turn to be taken care of, using much of our time for any matter.
Currently, with fintech companies, all these processes have been greatly streamlined. They offer financial services based on a set of information technologies. Thanks to them, we can now perform a wide variety of operations conveniently from anywhere that has an Internet connection, from the couch at home to your place of vacation.
However, the fintech sector not only covers everything related to banking, but also, for example, touches aspects of the insurance sector. For example, developing comparators that allow us to choose the policy that suits us best.
Fintech companies use technologies such as Big Data, Cloud Computing, Machine Learning or Artificial Intelligence to shape their products or services.
We can divide fintech companies into two large groups, on the one hand, we would have those that are 100% digital and, on the other, digital services provided by traditional banks.
Depending on the activity they perform, roughly we can classify the different types of fintech in the following groups:
- Crowdfunding: is the search for funding for projects, depending on the type you can find a reward when making a donation or not.
- Lending: for loans to companies or individuals, some alternatives to traditional procedures
- Financial services for individuals and companies: as applications for payment through the smartphone, comparators of banking or insurance products or agencies.
- Investment tools: for advice or trading, among others.
- Oriented to services related to cryptocurrencies.
The comfort and geographical and time availability of these services are some of the main reasons that have led to the growth rates they are demonstrating, marking a clear trend for the future.
Current situation of fintech companies in Spain
In order to have a vision of where fintech companies are located in Spain, we can use the report Innovation at Customer Service, prepared by the Observatory of Financial Digitalization. According to this, in Spain there are already some 300 Fintech companies.
According to this study, most of them are dedicated to loans (28%), payments (19%) and investments (16%). The rest is distributed among companies of financial infrastructure, foreign currency, management and financial products, among others.
Regarding its target customers, 52% of the companies have their activities destined to other companies (Business to Business or B2B) and 34% to the final user (Business to Client or B2C). From here, we must highlight that 75% of them consider that traditional banking can be a powerful ally for their purposes.
In addition, this report shows data that confirm that we are talking about young companies. In fact, the vast majority were born as of 2010.
As we have said, despite its youth, the Fintech sector is growing rapidly. Based on data from the DBK Sectoral Observatory of INFORMA, the business of fintech companies grew by more than 61.3% throughout 2018, with some 430.5 million euros in the total of operations carried out.
Regarding the use made by consumers of fintech services, Spain is in a privileged position since 37% of users of banking and insurance services enjoy the benefits of this type of tool. Above are:
- China (69%).
- India (52%).
- United Kingdom (42%).
- Brazil (40%).
This new panorama has meant the need to establish a regulation that is adjusted to it. In fact, since 2018 the banks that operate in the European Union must provide the information of their clients to those fintech companies that accredit the appropriate permits of official regulatory entities.
Trends in fintech companies
A sector as promising as this makes many interesting future perspectives open to it. For this reason, it is worthwhile to analyze what will be the way forward for these companies in the short term future, let’s move on to study some of them.
Neobanks are those banks with 100% digital characteristics, they do not have physical offices, they tend to offer services at a lower price and enjoy as much security as traditional banks. As a difference of the latter, the neobanks do not negotiate with the funds they have.
The wealthtech can be defined as digital tools that serve to help its users to invest their money and assets in an intelligent way, so that this type of operations are more accessible to all, and not only to great fortunes.
Few sectors are as subject to laws and regulations as banking; hence, the development of regtech applications, which ensure that banks comply with established laws, is one of the main fintech trends.
Very soon, we will talk more and more about proptech solutions, which apply technology to everything related to the real estate sector.
Special mention deserves in this section the well-known blockchain, whose participation in fintech actions is growing at a dizzying pace, since it is responsible for the validation and registration of operations, so that both go hand in hand in their development.
Function of electronic signature in fintech
When making an operation related to our finances, we are, logically, especially careful when it comes to issues related to privacy and security, especially if we execute it online. The cultural adaptation to this type of services together with the increase of computer attacks lead us to take all the precautions necessary.
Now, the electronic signature comes into play as guarantor of the provision of a quality and safe service. For both the provider of this service and its users, it is essential that the process of identifying the participants in the transaction be 100% reliable.
As we have said before, one of the competitive advantages of the fintech sector is to streamline processes that until then were tedious from the geographical and temporal point of view, ending in a few hours a process that until then could take days.
The electronic signature is a solution that goes hand-in-hand to complement this agility in a secure manner, avoiding theft and / or identity theft, with the obvious damage for customers.
From the legality side, the European Regulation number 910/2014 or eIDAS, deals with electronic identification and trust services for electronic transactions within the countries of the Union. This regulates the recognition of the electronic signature and its homologation in European territory.
Little by little, even the most reluctant to use new technologies are adapting their lives to these, appreciating the advantages and comforts they bring. Financial institutions, among which banks stand out for their popularity, they know it and increasingly offer electronic services, from web portals for asset management, to mobile applications.
All this evolution leads to the emergence of needs, above all to guarantee the security of these movements, which are more sensitive to security attacks. These needs are covered by tools, such as the electronic signature, combined with legislation that covers all aspects of this new reality.