The Fu­ture of Fin­Tech

An ex­clu­sive in­ter­view with Dr Soner Canko, CEO of BKM

Middle East Business (English) - - NEWS - by World Busi­ness An­gels In­vest­ment Fo­rum (WBAF) Turkey

What ad­vice would you of­fer to start-ups and en­trepreneurs in the Fin­Tech in­dus­try who want to seek funds from an­gel in­vestors?

When we look at suc­cess­ful mod­els around the world, we see that en­ter­prises in­ter­pret­ing the mar­ket cor­rectly and iden­ti­fy­ing the ar­eas where the ex­ist­ing struc­tures lag be­hind, there­fore op­por­tu­ni­ties ex­ist to im­prove them. Those who can of­fer easy and fea­si­ble so­lu­tions in these ar­eas stand out. There­fore, we be­lieve that im­prove­ment of fi­nan­cial ser­vices, in other words pro­vid­ing more qual­ity ser­vices to end users, forms the ba­sis of Fin­Tech and that en­ter­prises tak­ing ad­van­tage of these op­por­tu­ni­ties and of­fer­ing qual­ity so­lu­tions will be suc­cess­ful.

I think that Fin­Tech en­trepreneurs can draw in­vestors’ at­ten­tion to the ex­tent that they are able to suc­cess­fully present and ex­plain the dif­fer­ence of their own so­lu­tions and the value they create.

Does com­pe­ti­tion from the Fin­Tech in­dus­try pose a threat to banks? Or does it pro­vide them with op­por­tu­ni­ties?

In the bank­ing sec­tor, Turkey is one of the most de­vel­oped coun­tries in the world. We see that our banks have been of­fer­ing valu­able and prac­ti­cal so­lu­tions for a long time in the pro­cesses still be­ing de­vel­oped by many coun­tries around the world for Fin­Techs. On the other hand, Fin­Tech en­ter­prises have been be­com­ing prom­i­nent with their strengths such as their dy­namic and high-speed struc­tures. We can say that the Fin­Tech sec­tor is full of op­por­tu­ni­ties for the banks that can take ad­van­tage of this time pe­riod (where dig­i­tal­iza­tion and cus­tomer ex­pe­ri­ences change rapidly) and that can com­bine their strengths with the strong qual­i­ties of Fin­Techs.

Fin­Tech Is­tan­bul is recog­nised as the most com­pre­hen­sive Fin­Tech plat­form in South East Europe and the Mid­dle East. The In­ter­bank Card Cen­ter (BKM) is the big­gest sup­porter of this plat­form. What fac­tors con­trib­uted to BKM be­com­ing one of the big­gest play­ers in the Fin­Tech in­dus­try—not just in Turkey, but across the re­gion?

BKM aims to sup­port the ecosys­tem around it for ac­cel­er­at­ing in­no­va­tion, paving the way for new en­ter­prises and sus­tain­ing the com­pet­i­tive su­pe­ri­or­ity of the fi­nance in­dus­try in line with dig­i­tal trans­for­ma­tion. Within this con­text, as Fin­tech Is­tan­bul es­tab­lished in Fe­bru­ary 2016, we have aimed and con­ducted ac­tiv­i­ties to en­sure that Turkey’s Fin­Tech ecosys­tem is es­tab­lished upon a solid foun­da­tion, to al­low play­ers in the ecosys­tem to fa­mil­iarise with each other, to create Fin­Tech aware­ness and to pro­mote Turkey's Fin­Tech ecosys­tem abroad.

In par­tic­u­lar, the fact that our coun­try has a young and open-minded pop­u­la­tion, the abil­ity to quickly adapt to the new tech­nolo­gies and a strong bank­ing in­fra­struc­ture cre­ates sig­nif­i­cant op­por­tu­ni­ties for the Fin­Tech sec­tor. In ad­di­tion to all these, the banks in our coun­try have pos­i­tive views on Fin­Techs, un­like many other coun­tries. The banks see Fin­Techs as an op­por­tu­nity and make var­i­ous col­lab­o­ra­tions with them. We strongly be­lieve that in the fol­low­ing years, Turkey will be­come one of the world’s most sig­nif­i­cant Fin­Tech cen­tres.

What can you tell us about Fin­Tech projects in Turkey, com­pared to Fin­Tech projects abroad?

While in 2016, the an­nual value of the trans­ac­tions re­alised in Turkey’s Fin­Tech ecosys­tem was $14.7 bil­lion, it is ex­pected that in 2021 this will grow by 14% and reach $28.4 bil­lion. How­ever, the ex­pected trans­ac­tion value for Eng­land in 2021 is $330 bil­lion. When we look at these val­ues, we can say that Turkey’s Fin­Tech sec­tor is still in its in­fancy pe­riod and presents great po­ten­tial.

The largest seg­ment of the Fin­Tech mar­ket around the world is “dig­i­tal pay­ments”. Turkey's dig­i­tal pay­ment sec­tor is also large, with a large por­tion of the Fin­Tech mar­ket com­posed of dig­i­tal pay­ments. We can eas­ily say that the pe­riod ahead of us will be a time where in­ter­est in Fin­Tech’s other sub-ar­eas will grow. The col­lab­o­ra­tions to be formed in ar­eas other than dig­i­tal pay­ments will en­able the im­prove­ment of cus­tomer ex­pe­ri­ence with new prod­ucts and ser­vices.

How do you see pub­lic pol­icy in Turkey in re­la­tion to the Fin­Tech in­dus­try? Is it re­stric­tive, or does it open the way for op­por­tu­ni­ties?

Many coun­tries such as UK, Switzer­land, Ger­many, USA, Aus­tralia, Ja­pan, Is­rael, Sin­ga­pore and Hong Kong have started to make reg­u­la­tions to ex­pand the Fin­Tech ecosys­tem. Com­pe­ti­tion and in­no­va­tion are ex­pected to im­prove with the PSD2 (Pay­ment Sys­tems Di­rec­tive 2) reg­u­la­tion to be put into ef­fect in Europe in 2018. We can eas­ily say that both pub­lic poli­cies and reg­u­la­tors closely fol­low up the de­vel­op­ments in this are and take sev­eral ac­tions. Turkey will be­come one of the first coun­tries in the world that in­cludes crowd fund­ing in its leg­is­la­tion and thus will pave the way for nu­mer­ous fi­nan­cial en­ter­prises.

How will­ing are an­gel in­vestors in Turkey to in­vest in Fin­Tech start-ups and scale-ups?

We can say that in­vestors who are one of the most sig­nif­i­cant play­ers

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