About the Competition
The international competition Rietumu FinTech Challenge was held by its organisers TechHub Riga Academy and Rietumu Bank – in a symbolic place. The historical building of the former Bolshevichka textile plant, which was built in Riga in the 1910s and which has experienced several stormy historical periods, has a very special atmosphere. Today it is called Riga Powerhouse and is a popular place for various creative and educational events.
A well-known Finnish entrepreneur and a recognised expert in the field of banking technologies, Kristoffer Lawson also noticed the unusual atmosphere of the industrial premises where the event was held. He was emphasised by “This building is like a rough diamond which needs to be cut to become a piece of jewellery. The same happens with a start-up: first, one needs to contribute a lot of effort for it to become a real business.”
The format of the Rietumu FinTech Challenge competition is an enticing mix of presentations from contestants, workshops, discussions with mentors and speeches by invited experts. The atmosphere of interest and creativity is the distinguishing feature of this intellectual competition which, in the opinion of the organisers, with time will become a meeting place for perspective ideas with investors and potential partners.
Creative and bold ideas of start-up entrepreneurs have acquired a special meaning in the spacious premises of the factory, filled with light and air. Out of the original 20 projects, six reached the finals, where the winner was selected at the face-to-face stage of the competition.
About the Contestants
This year six projects were presented at the final event of the Rietumu FinTech Challenge competition. Nordigen, Escrown, Nota Key, Riddle Sense, Kuam Intelligence and Grandma. Mentors and the jury spoke in favourable terms about this year contestants, though there were some critiques.
Member of the Board of Rietumu Bank Eugene Dugaev said that various and interesting ideas were brought to the competition, “I would like to note the high level of the contestants this year. Two companies presented their projects in the big data field, offering new solutions for the technology of processing large volumes of data and bringing them to a clear format. There is a very interesting idea to perform authorisation in online banking without the use of passwords or code cards and still the offered method is absolutely safe, simple and uses modern cryptographic technologies. There is a Chinese company which intends to become a competitor to Transferwise for transferring money from Asia to Europe and which uses blockchain technologies.”
According to Evgeny Kazanin, the recognised expert, who has a rich international experience in developing his own businesses, the quality of projects presented at Rietumu FinTech Challenge is growing with every year, “Everything is fine regards to the quality of the products and technologies presented. Perhaps the participants lack ambition at times. Often the contestants don’t realize that the solutions developed by them can solve many more problems than they think. There is no global look and basically there is a lack of knowledge of how to make a business out of a product or technology. Therefore, I would recommend to the winner, who receives quite a considerable prize of EUR 5000 from Rietumu Bank, to buy tickets to London or Silicone Valley and to talk to other guys – creators and investors. This would contribute to their ideas.”
In his turn, Kristoffer Lawson noted that he would like to see more ambitions from event participants, “I have been involved in fintech for a number of years and I know that this area has big opportunities for start-ups. Speaking honestly, this year we lack someone who will get up and say, “I will change the financial system!”. I wish I could see someone who is much more enthusiastic about his ideas.”
About the Competition
Traditionally, the winner of the Rietumu FinTech Challenge 2016 receives an award in the amount of EUR 5000 from Rietumu Bank. This is the biggest prize among similar competitions in Latvia. Eugene Dugaev was asked, “Isn’t the bank financing its competitors by sponsoring such competition and establishing a money prize for fintech start-ups?"
“As a matter of fact, start-ups operating in the field of financial services are not competitors to banks. Banks have much more serious regulations, a higher responsibility and wider choice of tools for working with clients. Relations between banks and fintech projects can be compared to relations between mobile communication operators and Skype service. Everyone knows that you can call for free by using Skype. However, the active usage of services of mobile communication operators is not decreasing due to that. Moreover, mobile communication operators, which earlier were offering only the possibility to make a phone call, now also offer mobile internet services, etc., gradually turning into an infrastructure constituent. I think, the same will happen with banks. Everything involved in operational servicing of clients will be increasingly transferred to such non-banking structures. Whereas the huge layer of settlement services will still remain with banks, as there are different risks and different responsibilities implied. The availability of new ideas in the market of financial services resembles a kind of light confusion, but it is here where trends are being shaped, following which the world of financial services will be changed in the near future. Such companies are more convenient for end users; they are mobile, clear and less bureaucratic than banks, and it is where new technologies are originating like, for instance, blockchain for long-distance transfer of valuables. Besides, one has to understand that they are not always cheaper than banks.
Dugaev's thought that rapid development in the field of financial services is favourably influencing the banking activities was also confirmed by guests from Moscow – representatives of the recognised banking online service for entrepreneurs in Russia “Tochka” of Otkritie Bank. Senior Vice President, Director in Business Development Maxim Yanpolsky noted that the fintech field will continue developing and services will become friendlier. Banks will soon be able to improve the quality of their services due to increasing offers in the field of mobile banking. Marketing will become increasingly more digital, allowing banks to better recognise needs of clients and efficiently search for optimum ways of meeting them. With every coming year the financial services industry will become more digital, predictable and computable.
Member of the Board of Rietumu Bank Renat Lokomet noted,
“The Rietumu FinTech Challenge competition confirms for the second year that Latvia has huge potential for development of the fintech industry. This tendency is emphasised, among other things, also by the fact that the projects presented last year and noted by us, with time have shown good results and intensive development.
The business ideas we observed this year can and must also develop beyond Latvian borders. Looking at their growth today, one can assume that it will be as rapid for the start-ups presented at the competition a year ago.
It should be noted that in the financial business we will face a synergy between banks and fintech companies: these are replacing some banking services by these companies and the inclusion of additional opportunities developed by them in the traditional package of banking services. This process will be both revolutionarily and evolutionary. At the same time, it is important to understand that there is an important issue in the field of financial institutions which will continue to be a matter of consideration for fintech experts and top managers for a considerable time: “What are financial services – banking or banks?”