Mission Banks | Digital Acceleration
Conducting a study of investment opportunities in Fintechs in Eastern Europe for a European Development Bank
In recent years, the proliferation of Fintechs has shaken up the financial services sector (online banking, crowdfunding, mobile payment, savings management, financial and decision-making consulting). The Fintech wave, which is based on the convergence of several types of disruptive innovations (data transmission, storage and use and artificial intelligence), is impacting traditional finance professions to the point of potentially revolutionising the production and marketing models within the sector.
As part of its role to provide development assistance (economic and social dynamism, access to credit and financial inclusion), the Bank sought play an active role in the development of Fintechs in Central and Eastern Europe (CEE). In anticipation of targeted investments, it wanted a comprehensive overview of the existing Fintech situation in six countries in the region and the associated investment opportunities, in particular in terms of Alternative Business Lending and payments.
Four key success factors predominate in the development of Fintechs in CEE: dynamic underlying demand, favourable access to venture capital, strong human capital and tech-friendly local regulations.
The analyses carried out by the Ares & Co teams revealed:
Based on this observation, itself based on a detailed analysis of more than 300 Fintechs, the Ares & Co teams identified three channels to support the development of Fintechs in Eastern Europe:
Ares & Co also readjusted the Bank’s investment framework, in particular by reviewing the investment cycle, decision-making processes, all management indicators and valuation methods.