2 December 2018587


Many people remember the days when they had to stand in a queue to pay utility bills, get a certificate from a bank or make a statement on an account, while standing idle for debt. Today, many financial institutions have already implemented technologies that have helped bypass the long queues, saving time and money for both clients and the companies themselves and service providers. Could someone then suggest that being anywhere in the world a person can be in direct communication with the bank, carry out all the necessary actions on the account, submit an application or even get a loan and not spend a penny for roaming using only a few minutes Internet connection? Today, it is possible.

Foremost countries in financial technologies, such as Singapore, Japan, the United States, the United Kingdom and others, are already moving to a new level, introducing artificial intelligence everywhere that eliminates the risk of a person’s mood swings, fatigue, forgetfulness and many other factors. Can we observe the same technological abundance in Russia and Kazakhstan? Many laws have been passed to develop this sector, but what do we actually have? How will financial technology help develop business in these countries?

We define what stimulates the development of the financial technology market. First, it is the growing demand for financial services, both for ordinary citizens and for business. That is, financial technologies increase the availability and efficiency of receiving financial services by the population and business, improve living conditions and increase business competitiveness and, as a result, increase its profitability. Secondly, it is the activity of the regulator as a result of which a single national fintech ecosystem is formed. Financial technologies are one of the main tools to increase the transparency of business and the economy, the creation of infrastructure availability, which is mandatory for the development of most sectors of the economy. Third, it is the dynamics and flexibility of the proposal, which is constantly adapting to changes and needs of the consumer. Due to the high dynamics of development of the FINTECH industry, its representatives are overly sensitive not only to changing demand, but also to the behavior of all players in the market, which as a result leads only to an improvement in the quality of life of the population.

Stable business development exists in a peaceful interweaving of economic, social and environmental efficiency, which aims to meet the needs of the population without risk to the future. Financial technologies are a rapidly developing solution of stable business development that can improve the efficiency of many industries. By making financial services more accessible to the public, financial technologies help to fully integrate different segments of the population into the financial system. Despite the fact that financial technologies are considered by many to increase the efficiency of the financial system, they are also a lever for increasing operational transparency and environmental performance. Fintech encourages manufacturers to disclose information to consumers about operations at many stages of the process, to rationally use natural resources, to be faster and more efficient in processes. Thus, a natural market environment is formed, which has reached a new level of competition for the consumer.

Let's announce the main strategies and stop factors of the development of the financial technologies market in Russia and Kazakhstan. Strategies include the emergence of new technologies (artificial intelligence, predictive analytics, machine learning, big data, etc.) and products (in a digital bank, lending, scoring, marketplace, investing) entering new markets, natural market growth, cutting costs and on marketing and advertising promotion. Stop factors include the unattractiveness of the Russian and Kazakhstan markets for external investors, low regulation of the industry, low solvency of the population, unadapted tax system for fintech companies, high geopolitical risks, currency risks, weak cyber security.

Despite the fact that the forecasts of many analytical agencies have positive views on the future development of the fintech sector in Russia and Kazakhstan, there are the following problems that need to be solved in order to achieve real results. First, it is necessary to develop a start-up industry, by creating conditions for natural competition between major players. Secondly, large financial companies should open up and give such startups an opportunity to develop such startups with a new look at technologies within their eco systems, which ultimately will bear fruit on a larger scale. In other words, create Fintech incubators under the auspices of financial institutions. Thirdly, it is stagnation in the economies of Russia and Kazakhstan, which blocks the air for young enterprises.

The market is shrinking, the volatility of national currencies and the tax burden are increasing, sanctions and the growing share of state participation in business create conditions for the younger generation to increasingly leave Russia and Kazakhstan and build businesses in countries with a wider and developed market, open resources for development, and an optimal tax system and the effect of the incubator. Due to fierce competition in the west, startups are developing much faster. They are easier to attract funding and have at least some guarantees of protection and preservation of their intellectual property. In our countries, nothing will change until real reforms are carried out. And finally, this is the image of countries that does not allow start-ups to enter the international market and monetize their product.

In the next five years, it is planned to solve most of all these problems and to enable the real implementation of the definition of “digital economy”. To do this, digital hubs and so-called regulatory sandboxes are already launched, which enable young companies to polish their ideas, apply them and launch them into the consumer market. Business angels, venture funds, banks, other private and corporate investors will be able to choose the projects they are interested in to invest, just through these hubs and sandboxes, but government support will play the role of a major driver of development. The main areas of investment remain insurance technologies and technologies in the field of regulation. Key technologies and products in which investments will be made in the medium term include payment systems, e-commerce, and online lending services. In the next three years, digital banks will become the most promising areas for FinTech.

Summarizing, according to experts polled in Russia and Kazakhstan, people lack faith. Investors need to believe in an environment where their investments in young and ambitious projects will have the least risk unrelated to the product itself, start-ups need to believe in themselves to implement their ideas, the regulator needs to believe in its need for this environment to create the necessary conditions for the development of the industry in whole Even consumers need to believe that the digital product they use will not deceive them, will not turn off at the right time or create new problems. All this echoes of the recent past, when we stood in a long queue to pay utility bills and dreamed that someday we could do all this without leaving home.


Eldiyar Muratov  for Forbes