Answer ... All fintech industry verticals have evolved in Spain through the efforts of different national and international players.
The most embedded sub-sectors in terms of volume of activity and number of entities are lending (especially with regard to microloans), investment services (mainly roboadvisers and real estate crowdfunding), personal finance managers and payment solutions.
Answer ... Fintech companies in Spain offer a broad range of products and services, such as:
- equity crowdfunding;
- personal finance management;
- comparison of financial products;
- automated investment advice or management;
- foreign exchange/securities trading;
- payment services;
- client online identification; and
- big data related to the financial sector.
Answer ... Most fintech players are start-up companies incorporated with limited economic and human resources, which generally have lean structures.
Nonetheless, more sophisticated structures are also in evidence in some of the most successful Spanish firms that have successfully raised larger amounts of funds, and in the neobanks and investment platforms launched by some incumbents.
Answer ... Initially, fintech players have been financed by private investors (eg, business angels, family offices) through investment rounds, some of which have used crowdfunding platforms.
Access to private equity funds has been more constrained, due to the legal restrictions on investment by such vehicles in the financial sector. This has also sometimes hindered the ability of fintech players to access public funding such as grants and soft loans.
More recently, the volume of investment channelled by banks through equity investments and incubators/acceleration programmes has also increased.
Answer ... The position of fintech companies within the Spanish financial services landscape differs significantly from one sub-sector to another.
As regards lending, for instance, while microloan firms have gained significant market share, the market share of crowdlending platforms is still minimal.
Payment services offered by fintechs are also increasing as compared to those offered by banks – a trend which should be boosted further by the implementation of the second Payment Services Directive and the movements of big tech companies such as Facebook and Google.
By contrast, to date neobanks have gained market share only among specific client segments, such as millennials and frequent travellers, and as yet pose no threat to the incumbent entities.
The market shares of roboadvisers and equity crowdfunding platforms are also modest in comparison to the Spanish investment market as a whole.
Answer ... Fintech start-ups generally outsource processes such as online client identification for know your customer purposes, collection and claims management and infrastructure development.
The main restrictions to outsourcing relate to the processing of personal data under the EU General Data Protection Regulation and associated local developments. Moreover, regulated credit entities operating in Spain are subject to specific requirements for the delegation of essential services and functions, and the technological providers of such services must cooperate with the regulators to facilitate the supervision of regulated entities.