Fintech Review 2021 – Germany, Austria And Switzerland (GSA)


“For banks the pandemic meant that they had to digest 10 years of digitalization in only two years.” Paolo Sironi - Thought Leader and AuthorHello and welcome everyone to our 2021 Fintech Review for the German Speaking Area - Germany, Austria, and Switzerland, also called GSA. This is an annual tradition started in 2014, first in German, now in English. You can find the older reviews in the blog post below: 

“Crypto is coming, no question. The metaverse is coming and exciting for me is the question how we will pay in the metaverse” Oliver Oster - CMO and Founder OptioPay 

“What struck me the most in 2020 is Crypto. It is sooo much more popular today than one or two years ago” Janis Dust - CMO and Co-Founder EpapSubscribe Here 

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“As people are going from in-person to remote a lot of [banking] processes have to be updated. It is basically a huge accelerator for the whole banking industry.” Frank Schwab - Co-Founder Fintech ForumOur Sponsor Startupraven 

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“[Venture] Capital becomes more concentrated. It will get harder for the new kids on the block” Frank Schwab - Co-Founder Fintech Forum 

Our Guests 

Today I welcome our guests:

“10 years ago adding the valuation and market capitalization of the global top 500 banks and fintech unicorns plus the payment providers: 10 years ago banks represented 97% of that value, today they are down to almost 70%.” Paolo Sironi - Thought Leader and Author 

This time I ask our guests 4 questions on the current state of fintech, their outlook, and drivers for the future.

The questions are:

1) What is the strongest impact of corona on the financial and fintech world, immediately and in the future?

2) What is the most important development you have seen in total in 2021 for fintechs?

3) What do you see in 2022 for the fintech scene in GSA?

4) What field of fintech do you see becoming more important in 2022? Is it already the year of the green fintech?

Wishing you happy holidays from Frankfurt! We will be back on January 13th with an interview. Enjoy your time with family and friends and stay safe!

“The most obvious impact [of corona] for me was, that here in Berlin people have stopped paying cash and now pay by card or digital [cell phone or wrist watch]” Oliver Oster - CMO and Founder OptioPayThe Audio Interview Podcast 

You can subscribe to our podcasts here.

Fintech Reviews Since 2017“Some neobanks retreated with their business from abroad. They understood that volume is not enough for a great value offer” Paolo Sironi - Thought Leader and Author


Reach out to us, here is our audience survey, to give us feedback, suggest topics, interview partners or just to say “Hallo!”

The Interviewer 

This interview was conducted by Jörn “Joe” Menninger, startup scout, founder, and host of Reach out to him: LinkedIn Twitter Email

Find all links and show notes here:

Topics here:

fintech, insurtech, robo advisor, fintech investor, venture capital, banking, insurance, asset management, finance, technology, startup, crypto, bitcoin, blockchain, cryptocurrency, user interface

Welcome to start up bread that. I own your podcast and Youtube blog covering the German startup scene with News, interviews and live events. Hello and welcome everybody. This is Joe from celebrate that I oh. Welcome to our twenty twenty one fintag review for the German speaking era, Germany, Austrian Switzerland, also called GSA. This is an annual tradition started in two thousand and fourteen, first in German, now in English. You can find the old reviews here. Bottom line is I invite entrepreneurs, investors and thought leaders to our annual Fintag Review. We will publish it on the twenty five of December and then we will ask them a few questions. Due to limit the time, we have to do single recordings which with each of our guests. So I basically had four questions to ask them and they gave me their prepared answers. Today I welcome as our guests Yannis Dust, a young Fintech entrepreneur and Co founder, as well as chief marketing officer of EPAP and invoice APP. Everybody who had the pleasure to already hear our fintack review knows Paolo CEL honey, a fintech entrepreneur turned global research leader in banking and financial markets, as well as a multiple book author. You can learn more about him in our show notes. You'll find a link, of course, to his website and to his news book, and we have the linked profiles of all of our guests linked there as well. Our third guest is Frank Schwab, the cofounder of the Fintech Forum and Multiple Board member. And last but not least, there is Oliver Osta, a fintech entrepreneur and investor, founding part of a q vc and the chief operation officers coo of Berlin based up to pay. So first let's get started. Here are our questions. What is the strongest impact of Corona on the financial and fintech world, immediately and in the future? Well, the pandemic a cause an acceleration of digital adaptation on clients. It is like a bank had to digest ten years of digital innovation and shift in only two years. There was an unprecedented shift, in particular that involved the payment mechanisms and solutions, which is reflected in the market evaluation of those players. If you look at the total market share in terms of market capitalization and privated revaluation of the top five under the global banks, a plus, definta, unicorns and dependent providers. You can clearly see that ten years ago banks represented that more than ninety five and ninety seven percent of that share, but today, in two thousand and twenty one, they are down to almost seventy percent. So that means that the payment providers in particular and beenaining traction in terms of market evaluation because everyone is realizing the fact that they are will posted to garden most of the benefits, at least that in Nichia, benefits of...

...these digital acceleration which was really presented in two thousand twenty. Two Thousand and twenty one, right now we see a high demand on let's say automation and digitalization. So since people move from personal to remote, a lot of is have to be updated, and it's basically and a huge accelerator for going digital for the whole banking industry. And of course, fintakes are in the pole position to either support banking processes or, let's say, being prepared in handling everything remotely, online and automated already. So that that happened for sure over the last eighteen months. Whether you look at vintage or at established bank or direct bank. Everything more LAPP got pushed and given the investments into the industry, the FYNTAIC industry receive some of the highest levels ever, and that basically means going forward that the change and digitilization of banking increases, increases and increases. Corner I said, it's very, very strong impact on the entire fintax sector and especially when you take a look at the speed of digitalization. For me it's like insane, because customers are such or are much more willing to use digital solutions or, example, the check out at the point of system, which is super important for us at epapp, and in general, everything is becoming more digital, and I personally also love the trend of by now and pay later, which is driven by Klana and other companies. Obviously it's reinforced by online shopping in Corona Times. But yeah, many, many technologies have now always become mainstream. So I mean he and Blain. People always used to pay cash. Actually, everywhere they're going, it's a supermarket, in restaurant, all over the place, they're paying cash, and I think the biggest impact is definitely that people are now really paying with a card or with apple pay, so with their mobile phone. So that's the most obvious, I think, development since corona are a second question. What is the most important development you have seen in total in two thousand and twenty one four? Think tax. So I think what is most striking are the investments we have seen. So more or less so it looks like that. Every week you see three digit million number invested as a serious B C or d into any given fintage. The highest probably in payments, but also when it comes to let's say other business models in the Finnish industry, think of number twenty and twenty six or how many, many others. Also in the whole blockchain fintage, the distributed, letger industries, you see very, very high investments...

...and funding rounds. That that's right now most striking, and going forward we will see what the impact is of these investments. I even would would see that in some areas these investments are biggers, bigger as the spens of established traditional effects. So it's it's really very, very different than let's say three four years ago. Yeah, I want to mention two points. So first of all, the ongoing boost and digitalization, which I mentioned before, and secondly, what's struck me the most this year is crypto. So the topic is so much more popular than it was one or two years ago. Crazy development overall, and now it's also been fewed even more by things like n if t's or Web free and yeah, let's see what happens when stuff like that arrives in Germany. I have to say that I'm rather cautious about it, but it's super interesting to see what happens in America. Right now, I think, the the rise of the metaverse right. So crypto is coming and for me one of the big questions in the future will be how our will how we'll be paying in such worlds and such Meta versus, like is it Crypto? Is it still like euro or dollar pound? I don't know, and I think these will be like one of the biggest questions. And since we we just started with the Meta verse, especially in this year, the big hype with facebook turning their name into Meeta is, I think, one big signal and could beer like a big potential for Fintax as well, when this something very important to me. They easy. This shifts that towards rebanditing financial services around. There a couple of ideas one which I don't find particularly in overachief is they one of the super ap Psun that is already dominating differintex in in China and is now getting on the desk of the CEOS of payment companies, like Taytal, for example, announcing that they want to be one of these. But the second is a bit more fitting the purpose, which is that the emergence of this is so called community banks, so sort of a super appab target it to special community. I like to remind the interesting acquisition of square of tidal. Basically, tidal is a competitor of spotify, a very small competitor spotify, and square decided to buy them out because jectors beliefs that by servicing a community, for example, of artists in resolving their problems in terms of finding the machinery or producing their artwork, is the way to become relevant inside the different ecosystem and better for to extract value from the work of the financial services. The Solutions. Now checkers is said clearly that the new ideas have found that intersections, I'm reading is quota, and we believe there's a compelling one between music and the economy, and that is basically one of the most interesting perspective that I've been seeing in the last year, all inside venuabook. Thanks in the compartment economists. My third question, what do you see in two thousand and twenty two for the Finn Tax in gs a? Again, it's Crypto, in my opinion. I hope it's becoming more popular in mainstream here, just like the buy now, pay later...

...trend. Yeah, and maybe even the technology behind crypto itself, which we become more popular. What started in America a few months ago will be here in two thousand and twenty two, for sure. So I think in in these countries, in the let's say more German speaking countries, it will be still about the development of the the fintech infrastructure right and bringing the the people digital. I mean since corona boosted it very much. We we do have now a good, good way to compete also with us, where like mobile payment, etc. Has Been always been normal. But still in Germany, Austria and Switzerland we still do we we still need some more development here. And, that being said, also what we do with the transaction data here in these countries, right, we are always very much restricted on the on the analytics side, but looking into pct too as well, and not only open making, also open data, what we will do with the data, especially the transaction data, and what kind of offerings we can take that to our customers. I would say the journey continues. The biggest bigger. The biggest ones will become even bigger. So they basically means they establish themselves in the marketplace deeper and and further, and of course that also means for the ones who are rather at the starting point, it's more difficult to get the exposure, in the attention. That's something I see because it looks like that the capital concentrates now, while three, four, five, six years ago the capital was much more distributed. So I would argue it becomes tougher and tougher for new kids on the blog to also pick a share of the changing, let's say, overall industry. So not all. So I would not only look at and fintage, look at banking and then think of vintage within the banking in the street, because I think you can't separate the two from each other. And so that that's what I think is something we will see in in the next year, not to say in the next year's so it's not only about twenty twenty two, and I think it let's say, for people who want to found or create a new stuff, but they really need to come with something very, very special. So let's say the the time where you could just create a mobile bank, or let's say you do you have an idea on payment. That's not good anymore for for let's say, for fun idea, that search for funding. That's probably another aspect which the audience may find of interest. Well, I think that there are two things which are particularly delevant for the region of Germany, Austria and Switzerland. One... that consideration of the role of the near bank sys. Some of them retrench their from there and operations about that. They need to understand that volume is not then off it would, you let the factive value. So they didn't have yet that mechanism. That goes in the direction of the Super Up, for example. They've been looking for a few years about being a marketplace of products, but that is not enough, absolutely not enough, because it doesn't create an in all insolution for the clients, but just of it just makes a digital display of different products which are in a sense disconnected. And the second of course, that this was at the year of defy and there's no better place than sweet celand that to promote, if you like, defin in all of its faces, which are also legal and regulatory as well as technical. So I believe that Germany, Austria and the sweet serland that might have an important role in the evolution of the centralized kindance going forward. Our last question. What field off in technique he becoming more important in two thousand and twenty two? Is it already the year of the Green Fintag is it already the year of the Queen Fantag? I think it's not really about the green fintake itself. It's more what Greden companies, or let's say yes g companies, can do with the data, with a transactional data. So there's a good example of Ecolotics, for instance, for during my point of view, of great product around transactional data, combining at with, for instance, a carbon footprints or analyzing what you can how you can offset it, etc. But there's still a big development possible right is still a huge gap and I don't know if, like really the the green banks will will survive in that bull market, but in general I think there will be more combination of green and Fintag so that that they are drawn joining forces. But a pure green player in that market with like a green approach will be difficult. Maybe maybe we still need like three four years. Don't roade. So we, as pepper, also like a small part of a sustainable fintax or green fantax. But I have to say sustainable fintax itself are definitely becoming more popular, but they don't see this as the year of the Green Fintag. I really rather still have the feeling that it's more difficult to create a system and they will product for the masses. And that does mean I think the aspect is not important enough, because I really am a big advocate of it. But I don't know, I see it as a necessity to be a sustainable company, but I have the feeling that it's still difficult to place in broad target groove if there isn't an absolutely clear added value for the user. So if it's a clear added value, then for sure it will become more popular. But yeah, right now it's I'm I think it's quite hard to be a sustainable company with the edit value for it. Yeah, and oh I forgot. Let me take that one. I also see that could do. Obviously will be the topic of two thousand and twenty two even for tech. No, not from my perspective. That something we will see in two or three years from now. Anyhow, the whole thing around he is che so it's not only Kree and it's also the the s and the Chi. That something a little bit later, from my perspective, probably what's becomes hot, because...

I think that's your question. I personally think that the whole open banking and API banking we've talked about the last three, four, five, six years there have now reached maturity level that actually you can go into the business. So, let's say, and let's say the discussion around by now pay later, the whole thinking around a batted finance, we now have much better, much better foundation with APIS and open banking initiatives in order to be able to implement let's say, I'm better strategy by now. Pay Latter is an embatted strategy, usually because you offer a consumer loan into and merchent process. So that that's kind of, let's say example, but we will see that in also additional use cases and that may probably something which becomes more relevant than before. I don't think the point is about green or not green. We all have to be and that requires, if you like, much higher transparency than what we've seen today. What I think that matters is what really matters in the transformation of a nancial services on mobile technology, which is the enderstanding. Finally, that platforms that are the real competition. If you go back fifteen years, we clearly see that only platforms worn on the Internet that you get, all the social media platforms you get become a platforms for sup forth. But for the last ten years of interconnovation, interpreneurs were really focusing on simple minded solutions, the unbundling principle, which makes no sense, if not the creation of a smaller, leaner and creer resolutions. The business value and the sustainable business value can only come by the capability of bundling back these unbundles services into something. They generate the new value, and that is the role of platforms. To Platform Strategies are clearly emerging, which I identified in my last piece of literature. Bags off in technplat economies. One is called contextual banking, where the bank became invisible through an open banking and open finance perspective, and the other one is conscious banking, where the bank remains transparent and visible to generate value for clients. Now, to conclude in a short coupital sentences, it is the opportunity to eliminate friction from a non banking ecosystem. Then makes banking get contextual, to unlock new value, valid that was not there before because that level of orchestration was not possible. Digital Technology ables that, but it is the opportunity to demonstrate value for clients, and the clients have to pay for access in the platform and makes banks conscious to unlock a hidden value. There is value and francial services, which does not come to the surface because there's no understanding on how to spiens. Again, effective is arry better, but this is the time a Doun where some institutions started understanding days, and I believe this would be the direction in twenty thirty two and going forward. Finally, the competition is on the platform con and finally, wishing you happy holidays from Frankfort, we will be back on January thirteen, two thousand and twenty two with an interview kicking off our new corporation with the German...

Ai Association enjoy your time with your family and friends and stay safe. Thank you, bye, bye. I would say one alien could be quanty. Yes, Merry Christmas and happy New Year and see you in two thousand and twenty two. All right, thank you all for listening and have a great start in the new year and had merry Christmas. Merry Christmas, bye, bye, just that's all. Folks find more news streams events at interviews at www dot start of bread. That hio. Remember, SHARON IS CARE.

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