“What is the difference in the development of fintech industry in Ukraine and EU countries?”, — write: epravda.com.ua
We don’t even think about it, but fintech has long become part of our everyday life. Fintech itself is not a trend, but a mainstream. Residents of EU countries have at least one fintech card in their wallet. As an example, according to SplitMetrics, by the first quarter of 2025, the number of users of neo-bank applications in the UK will for the first time exceed their number of traditional banks. If five years ago we talked about the development of fintech as a vector of the future, today fintechs are actively competing with banks and conquering their niche for fast and convenient payments. However, fintech players and the whole country as a whole have their differences in Ukraine and the EU. Formed regulatory field and numerous consumers: who is still far from whom Let’s start with what determines the framework for the development of the field – from the legislation. Europe has a stricter regulatory field: there fintechs are almost completely equated with banking institutions.Advertisement:Advertisement: Read also: Fintech in 2024: what to expect Although there is still a gap in the ease of registration and some mandatory reports. Ukraine is still only adapting its legislation to European standards. But I am certain that very soon the requirements for fintechs in Ukraine and the EU will be similar. As for consumers, Europeans are more open to fintech, while Ukrainians partially retain their attachment to traditional banks: for example, the number of fintech users in the digital payments segment in Germany is almost 70% of the country’s population, and in Poland – 71%. Already, British fintech companies lag behind banks by only 6 million users. In the first half of 2024, British non-banks added around 9.5 million new Android users. This is 81% more than the British traditional banks. While all Ukrainian fintech users are so far only NovaPay clients, of whom there are almost 400,000. The key reason for this is that the competition in the European market is higher, and fintech in Ukraine is at the stage of development. Yes, there are currently about 200 fintech companies in the EU, while in our country NovaPay became the first non-banking financial institution that received an extended license from the NBU and launched its own mobile application. And so far it is the only one in this field. The multi-functionality of mobile applications The heart of any financial institution today is in its mobile application. The first thing a person does when interacting with a financial institution is to register. Both here and in Ukrainian and European fintechs, online verification prevails, that is, there is no need for the physical presence of a person during onboarding (spoiler – it is often easier in the EU than in Ukraine, but the question here is the requirements of different states and regulators for ID). All transactions are in the application, often (or always) without the need for any physical movements, except when it comes to cash transactions. The next common feature is in full digitalization and the attraction to superapps. Because it expands the boundaries of financial applications, makes the client’s life easier and encourages him to spend more time in the application. For example, at Revolut you can not only make payments and transfers, but also buy precious metals and cryptocurrency. At Zen – get an extended warranty for electronics that the customer purchased using the service. I can’t say that we followed the same path at NovaPay, but in our application you can also go beyond traditional finance: for example, purchase our own bonds and the ability to pay for parcels at a profit. Some Ukrainian banks have also implemented such features, adding the possibility of buying tickets and insurance in their applications, but that is already a story about imitation of fintech practices by classic banks. Because our common goal here is to create a universal platform where users can conveniently manage their finances, invest in various assets and make daily payments in one place. This makes financial services more accessible and convenient for everyone. Why cyber security is priority number 1, and what is artificial intelligence here? Looking ahead, this is a common trend for Ukraine, the EU and the whole world. Global investment in cybersecurity will reach $1.4 billion in 2023, according to a KPMG report. This amount corresponds to several years of programs from the World Bank to support developing economies. And this means that fintech companies do not delay in protecting their data and the funds of their clients. At NovaPay, we understand that the safety of our customers’ funds is our primary goal. Therefore, cyber protection systems are also not a wish for us, but a standard of work. We invest a third of our IT budget in this direction, so that our customers know that their money and data are under reliable protection. At the same time, AI is a top priority for investors in cybersecurity and in fintech in general – because it plays an important role in cyber defense and is becoming a new front in the digital war. Investors invest their funds in a wide variety of projects – from risk analysis platforms to anti-fraud solutions. In Ukraine, many financial institutions, including us, use it in the processes of onboarding, verification, and support systems. I think that in the coming years we will see a focus on all aspects of artificial intelligence, including the creation of cybersecurity models, consolidation of efforts in this area, attention to code security and API security. Despite the fact that investments in banking significantly outweigh investments in fintech, as well as the revenue of banks compared to the revenue of the fintech industry – significantly more – $ 3 trillion. US vs. 79.38 billion in 2023 – I continue to be a big fan of this particular area. Because the dynamics of its development, progressiveness, and technology inspire me and those close to NovaPay. Yes, fintech in Europe and Ukraine are developing somewhat differently – because they focus on different customer needs – but we definitely have a common future.
