The growth of the fintech sector in Spain is, to say the least, surprising. At present, the country has 677 companies dedicated to this work, as well as some traditional entities. Despite the various challenges they have to overcome, their development continues at an optimal pace.
Fintech sector in Spain
Although it is not easy to obtain official statistics on this type of company, several reports indicate that Spain is among the top European countries in terms of the number of fintech companies. This growth is undoubtedly due to the large volume of their operations, especially in large cities. In addition, they offer their services to other companies on a B2B basis.
The operation of these companies is marked by regulatory compliance and risk management. The latter task is fundamental to their processes and strategies, as it is the foundation on which to build the credibility, security and quality demanded by their customers. In this regard, of the 722 companies in September 2021, only 45 went into insolvency or liquidation. Despite the challenges and difficulties, most of them manage to survive in a difficult market.
They are also supported by the financial authorities. This is an important aid to foster innovation, as companies can develop the necessary tools to improve their operations, as is the case with the creation of the financial sandbox. This has provided them with a secure and stable legal framework, which is very necessary for continued growth.
Fintechs have raised 214 million euros in various financing rounds, making this sector the third largest in terms of investment raised in 2022. Such a situation has not happened since 2016, demonstrating the renewed interest in these businesses.
On the other hand, the ecosystem continues to grow by providing new offerings to its customers, either through innovation or through consolidated proposals. In this sense, they are able to reach where traditional companies fall short to fill the gaps they leave behind.
For example, they offer financing solutions, such as flexible credit insurance or Buy Now, Pay Later, which provide greater flexibility to the customer. In addition, they can cope quickly with demand and enable digital payment. This makes them companies that provide great support to e-commerce, another growing sector. Thus, positive synergies can be established between the two.
They also provide credit solutions based on banking software or better user experiences. Open Banking has had a major role to play in the latter, offering a European standard for instant payments, which is a very attractive service. Thanks to all these innovations and many others, the sector is growing at an unstoppable rate.
Fintech services provide numerous benefits to their customers. One of the main ones is personalisation. By implementing IT tools, they can offer better solutions and have a wide variety of data that are processed with Artificial Intelligence. In this way, customers are better profiled and the product or service is tailored to their needs.
Another important advantage is that they maintain a high level of agility, which is combined with greater efficiency and simplicity in their processes. Traditional banking is not able to offer such speed, something that attracts the attention of the market.
Convenience is an advantage derived from the previous one. Customers access these services when they need them and they are available 24 hours a day. This is a qualitative leap that conventional banking cannot match. Moreover, it is important to note that the gap between the two models will continue to widen in the coming years.
Finally, fintechs democratise access to financial products. Almost any profile can obtain the financing it needs, regardless of the size of the company. By not requiring face-to-face assistance of any kind, customers have a greater number of products at their fingertips. And when they sign up, fees are lower and conditions are completely transparent.
The growth of the fintech sector has been sustained throughout 2022 and demonstrates its attractiveness, as it manages to attract a large volume of investment, as well as the interest of both businesses and end consumers. All this is due to the competitive advantages it offers, such as faster processing times. It is undoubtedly essential that we follow its evolution in the coming years.