The Future of FinTech
An exclusive interview with Dr Soner Canko, CEO of BKM
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