Thanks to its innovative financial sector, a willingness from the industry to partner with fintechs, and its strategic position within the European Union, Poland is poised to join the competition to become one of Europe’s key fintech hubs and the leader in the region, according to a report by Fintech Poland.

Titled “FinTech in Poland – barriers and opportunities,” the document sheds light on the state of fintech in Poland and identifies key opportunities and challenges to the growth of the industry.

The research found that the current Polish market is characterized by positive attitude of banks towards fintech companies and by mutual desire to work together. Polish fintechs as well are largely geared towards collaboration with banks, recognizing the need for cooperation and mutual benefits resulting from it.

Furthermore, implementations such as contactless payments by means of cards and HCEs-based on mobile payments, bank branded pay-by-link payments and sector solutions such as BLIK have made the country a European benchmark for this type of technology. BLIK, a mobile payments service, was introduced in 2015 by six of the biggest banks in Poland.

Unsurprisingly, electronic payments and financial platforms are the primary areas of focus within the Polish market. Other well-developed areas include analytics, machine learning, and sales channel development, and crowdfunding.

According to Bernard Gołko, a fintech sector market expert, although Poland is indeed lagging behind in many sectors of the economy, its financial industry is definitely an innovative one, not only when compared to the Central and Eastern Europe (CEE) region, but the whole of Europe.

“This is largely a bonus for us starting from the second position. It allowed Polish banks to utilize cutting-edge solutions from the get-go,” Gołko said.

“This does not mean that our fintech market has no room for development – quite the opposite. The digitized millennial entering the market, the falling costs of processing and accessing information, the availability of highly educated IT specialists – all these factors have provided a fertile soil for the emerging industry. Other contributing factors include the size of the market and Poland’s ambition to become a leader in the CEE region.”

International players have already started using Poland as a testing-ground for fintech products to be offered globally, according to Maciej Sadowski, co-founder and CEO of StartUp Hub Poland, a non-profit foundation supporting startups in CEE. One of them is Swaper, a Latvian peer-to-peer lending platform developed by Wandoo Finance Group that also operates in Poland and Georgia. 

Swaper promises 12% returns to loan investors, for loyalty program members even 14% interest.  It claims to be the first peer-to-peer lending platform developed with the help of investors.

At the beginning when p2p lending started in Poland, many people were skeptical about such a new form borrowing and lending money. Potential fraud and unknown against new p2p platforms were a hurdle. However, thanks to new methods of verification the p2p platforms have became safer and popularity of  fintech and p2p lending is growing steadily in Poland now. Swaper also tries to get trust with the help of recently new launch IOS and Android P2p Marketplace Apps.

Macjej Sadowski, CEO of Startup Hub Poland told bne IntelliNews in an interview last year:

“We are a playground for Western partners to test and popularize the most advanced customer interfaces and payment methods. Already, as far as standards are concerned we are ahead vis-a-vis regional markets and even Western neighbors.”

Poland can brag about several fintech success stories: Cinkciarz, a currency exchange platform and one of the fastest growing companies in East and Central Europe; and Finanteq, an e-wallet developer that is working with leading European banks.

Kontomierz, which offers business-to-customer and business-to-business financial information services, including KontoX, an application programming interface for read-only access o bank accounts, was acquired in January 2015 by German online lender Kreditech for “a seven digit amount plus Kreditech shares.”

Other established players in Poland include PayU, an e-wallet services provider operating in 16 countries owned by Naspers, and Blue Media, a company providing innovative solutions in the area of payment services, finance and insurance. Both have been offering their innovative payment products to banks, e-commerce merchants and retail customers.

Despite the high popularity of mobile and e-banking and an openness to innovation, Poland has several weaknesses that pose challenges to its rise to become a regional fintech center. Among these drawbacks, the report cites unfavorable regulations for fintech, a lack of support on the part of the government when it comes to a financial innovation sector development program, as well as limited access to private equity capital.

Featured image: Warsaw, Poland, via Pixabay.