Cointelegraph in Spanish spoke with Rodrigo García de la Cruz, CEO of Finnovating, about the world of financial technologies, the sectors interested in working with fintech and the current situation in Spain.
Fernando Quirós (FQ): How did you get into the world of financial technologies?
Rodrigo García de la Cruz (RGC): Since I was a student, I’ve always had two great passions: the world of technology and finance. For this reason, I studied electronics and robotics and at the same time studied the Bachelor of Business Administration. After a few years in the most technological world (programming robots and automatic machines with artificial intelligence), I worked at various banks such as Citibank, Barclays Bank or Banesto. During these years, I recognized the complexity of the sector and the high value of financial institutions, but also the room for improvement that existed in terms of innovation. For this reason, I started the world’s first pioneer program for digital banking management at Citibank in 2013. But despite the importance of teaching and science, I realized that it wasn’t enough and that I had to leave everything and take action. And then I started Finnovating in 2015 with the goal of promoting the fintech sector by building bridges with regulators, regulators, companies and investors and giving it the visibility and importance they have.
FQ: Do you think fintech companies are changing the financial ecosystem worldwide? Why?
RGC: Total. We will see more and more players offering alternatives to traditional financial products and services. In addition, tens of thousands of B2B fintech companies are founded to develop innovative solutions that help accelerate the digital transformation of the financial sector in general, make it easier, more transparent and adapt it to the end customer. They enable the most useful technologies such as big data analytics, blockchain or artificial intelligence. Cooperation between the global fintech ecosystem and banking will change the sector forever. But let’s not forget that consumer behavior will require other types of relationships, requirements and experiences in this new digital environment. Fintech was born digital and its main goal is to provide this user experience and quick adaptability in these times of change. That is why it is so important because the end customer is the focus more than ever.
FQ: Which areas of society are most interested in working with fintech?
RGC: So far, banks and insurance companies have been best positioned, but the pace of collaboration has not been what it should be. In one of the Finnovating reports that analyzed all investments in fintech in Europe, we can see that less than 25% of all investments in this type of startup came from the financial sector.
We see that the situation in Covid19 has polarized cooperation. Some companies see fintech as a way to accelerate and seamlessly rely on digital transformation. Others, on the other hand, do not prioritize external cooperation and endanger their short and medium-term competitiveness.
There are other sectors in the technology, telecommunications and retail world that are showing great interest in FinTech financial technology and are entering into a business that until a few years ago was reserved for banks and insurers. Because they find synergies and look for their roof to offer customers not only their telecommunications products, but also content, as they have been doing for several years, and services such as finance, insurance, that are trying to benefit from customer benefits.
FQ: Do you think fintech is a fad or solve problems?
RGC: I asked myself the same question in 2012 and saw where we arrived. Every startup has to solve a problem if it wants to be successful, and fintech companies are no exception. In addition, fintech companies will not only be a fad in the technological and digital world, but will also play an increasingly important role. It should be noted that today three out of four fintech companies worldwide are B2B, meaning they were born to work with the sector and to help improve and solve problems in the financial sector in general. Traditional banking is facing a digital paradigm shift that has no going back. Here the digital requirements have to be balanced and the generation of new products and services adapted to the new times. All this without loss with maximum transparency, without opacity and completely omnichannel. Other industries are already more digitally mature (travel, traffic, music, games, …), and the financial sector is now facing a new scenario full of challenges and opportunities to accelerate its digital transformation to Covid19.
CF: What is the fintech ecosystem like in Spain today? Have you been affected by the Covid 19 crisis?
RGC: The fintech sector in Spain is currently one of the top 10 in the world in terms of number of companies. According to Finnovating Maps, more than 1,300 companies would be active if we added Fintech, Insurtech, Proptech, Regtech, Legaltech and Wealthtech. We could say that we are the country with the most per capita businesses of this type. What needs to be improved is investment, as only 3% of all European investments were made in 2019.
The Covid 19 crisis will affect all sectors and fintech will be no exception. On the other hand, however, we see that it is an industry that will emerge from this situation very strengthened and driven as we turn to new paradigms for more digital and distant life. The new world will be cashless where fintech companies will be the key. parperless, where Regtech and Legaltech will be part of the solution; physics-free, where e-commerce and paytech will be the new normal and a networked world in which insurtech and e-health will be a reference in health and safety issues.
CF: What is Finnovating?
RGC: Finnovating was born to solve some of the needs that I could check for years when I worked in banking and then in academia. During these years, I found that there was a large spread of startups with low visibility, with a great lack of information and ignorance of existing alternatives, especially worldwide. It has been difficult to gain access to fintech ecosystems, and especially to their CEOs and founders, who are ultimately the real “decision makers”. At the same time, there was and still is a need for companies to digitally transform themselves through innovation through proof of concept, pilot projects, co-creation and investments. After these years, fintech and companies demanded a solution for collaboration and connection in the form of a global platform. And here Finnovating can work in global ecosystems to identify the most innovative fintech companies worldwide and to make them visible via a global platform. On the one hand, the goal is to support fintech companies through capital raising and collaboration in scaling. On the other hand, you are helping companies work with the fintechs that interest them the most, and investors to identify the best opportunities of the moment. For this purpose, we have been creating fintech, insurtech, proptech, regtech, legaltech, wealthtech, paytech and e-health ecosystems for five years, bringing together more than 8,000 founders and CEOs from more than 30 countries connect. We have made hundreds of very successful collaborations and investments. For this reason, many banks, especially in Europe and Latin America, turn to Finnovating to find and integrate startups. For this reason, we have decided to transfer this model to a global area and with the advantages of technology. Ultimately, our working model is a matching as a service with global vision, accessibility, agility and confidentiality, so that all actors in the ecosystem can effectively contact, collaborate, help shape and invest in fintech companies.
CF: What activities do you do?
RGC: We currently have three main activities:
Finnovating Platform – Matching as a service. Open innovation market between fintech and corporate investors, cooperation, co-creation, introduction of PoCs, MVPs as well as investment and acquisition of fintech companies. Be part of the global fintech ecosystem with a single digital and global channel.
Digital fintech meetings Specialized meetings, specific meetings with the decision-makers of the most important fintech companies, who invite industry leaders, regulators, investors and companies who are interested in their cooperation. Global and local reach. Generalist and vertical. Massive or exclusive, depending on the goal of the event, always with the common denominator of the generation of the fintech ecosystem. Unconference, breakfast with experts, poker table with key players in a fintech industry.
Open Innovation Strategy Service. Definition and implementation of innovation strategies for companies and institutions with regard to collaboration, joint creation, introduction of PoCs, MVPs as well as investment and acquisition of FinTech. “Fast-track” method, which offers in-depth knowledge of the fintech industry (and its various industries), flexibility in decision-making and constant professional support in the process (co-creation, MVP and investment).
FQ: Given the position Finnovating has acquired as a benchmark for fintech and the platform model, have you received offers from banks and investors to get into your capital?
RGC: We had approaches from banks and insurers as well as from investors who were interested not only in our business model but also in our role as a bridge between fintech and companies and investors due to the large number of business and co-creation opportunities that arise We see that it happens in our everyday life. At the moment we are not in the company’s sales mode, although in the future we will not rule out supporting a strategic partner who will help us finance the growth and development of the business plan, which is so ambitious that we have committed ourselves internally .
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