A matter of trust • Chapter summary
GDP grew 2.5% in the past year, surpassing the EU average of 1.8%, according to the 2019 report of Spain's national bank, Banco de España. One-fifth of GDP is attributed to Catalonia, which has been voted the best southern European location for foreign investment for two consecutive years by the Financial Times Group.
The traditional banking sector remains strong, with 12 banking groups making up 90% of the industry. Since the 2007 economic crisis, there has been a conscious effort by banks to clean up their balance sheets and strengthen their image. However, it seems that the damage, in the public’s eye, has been done, the resulting lack of confidence in the sector limiting its ability to grow.
Testament to this shift is the growing popularity of new players in the field, including digital banks that fall under the umbrella term of fintech, as well as innovative kinds of investment funds. As a result, many of the interviewees we spoke with doubted the future of the traditional banking sector, saying that although the big banks will not necessarily disappear, traditional banking as we know it will become obsolete. For example, when speaking with Duarte Libano of Ebury, a fintech company that has won over 20 awards in the last few years, he pointed to agility being the key differentiator between fintech and traditional banks; “on the financial side we are able to provide more services, currencies, and lending products[...] we can approve credit in three hours, whereas the bank takes a month or two.” The speed and flexibility with which such companies are able to operate, give them a sure advantage. Even still, traditional banks are investing heavily in digital banking and their apps, meaning there may still be hope for them not to lose relevance.
Investment funds, as well, are transforming away from how they have traditionally been seen. Two of the funds we spoke to, Nekko Capital and People and Planet Partners, highlighted their commitment to catering to start-ups with social impact and technological potential, an area often neglected by big capital funds. As a result, a more representative future of finance is on the horizon, one that reflects the actual ideas emerging from a society developing in tandem with technology. ✖