— In Ukraine, banks and FinTech companies have different priorities. Communication between them is not the best. What would be your message for FinTech and banks?
— There is nothing new for me to say, I have been reiterating this at every conference, workshop or task group meeting. We are interested in developing comprehensible and transparent rules that might be different for FinTechs and banks, but understandable to them. Why different? In the global practice, different capital requirements and normativestandards exist for the businesses based on the types of financial services they provide.
The rules, nevertheless, should be easy to understand for all and provide the clarity necessary for planning an expansion to offer a wider range of services. For example, Revolut, in order to expand its business model, obtained a banking license in the UK in compliance with the regulatory requirements. The same thing should be happening here.
I see the future in the liaison between the FinTech companies and the banks. Some banks are not ready for this communication and, in my opinion, might lose their competitive edge.
The future may develop in three ways. The first is, "See nothing, hear nothing, know nothing, I am a bank and no one can serve clients better than I." The second is, "I am doing my own FinTech." Examples of the second approach are Monobank (operating under the Universal Bank's license) and, to some extent, PrivatBank, which has been developing its FinTech functionality. The third way is a mutually beneficial cooperation: FinTech companies are faster, more flexible and can provide interesting tools to their clients, and they can do it through the banking system to comply with the complex regulatory requirements that they do not want to invest in. For example, they might unwilling to set up AML, financial monitoring, or customer service units.
To recapitulate, the future lies with the cooperation between FinTech and banks. Those banks that fail to restructure, risk taking a back seat. On the other hand, I do not think they would disappear in the next five or ten years. But they are likely to lose a significant share of their market and clients. I also do not rule out a possibility that, similar to the developments in the European market, some FinTech companies with significant potential will eventually recognize the need for a banking license. A good example is the mentioned Revolut and PayPal, which has a European banking license in Luxembourg.