Fintech Review 2022 — Germany, Austria, and Switzerland
Management Summary
Welcome to a Startuprad.io tradition, airing on December 25th. A review of the most important events in Fintech from the perspective of our guests for the 8th year in a row right now. The most important development in the fintech world was for most guests the FTX collapse. During the recordings agreed that fintech investments have seen a peak — there will be a valley behind it, but there will be new investment records achieved after the expected recession. As next hot topics emerged embedded finance and crypto. Not all crypto will be hot again, only with a sustainable business model, there is a future according to our guests. Actually, some guests welcomed a shakeout of the market — albeit it should not have been that violent and long. Tune in for the rest.
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Introduction to our Fintech Review
For years Startuprad.io makes an annual fintech review, where practitioners, investors, and fintech folks get to wrap up their year. The focus is on GSA, but it seems to be more and more the case that markets get more interconnected and trends follow each other in much shorter time spans. It is also a tradition that we publish it on December 25th.
Keep in mind that since the first fintech review the field has changed and broadened a lot! Really a lot. Where it used to be only payment apps, now there are fintechs in insurance, crypto, proptech, banking, SME banking, capital markets, and much much more. So we thought we would invite guests from a diverse range of backgrounds to give you their perspective on the time of corona, the year 2022, and the outlook for next year.
Our guest this year:
- Meeri Savolainen, CEO and Co-Founder of Insurtech INZMO
- Luca Frignani, CEO and Co-Founder of Credit Platform Exaloan
- Henrik Gebbing, Co-Founder and Co-CEO of Crypto Custody Bank Finoa
- Frank Schwab, Co-Founder of the Fintech Forum and multiple supervisory board member
Our questions to the guests:
- What was the most important development in the fintech world in 2022?
- Do you think fintech has peaked in terms of investments — as some data suggests?
- What is the next hot topic in fintech? Is crypto making a comeback or are we all focusing on API tools for embedding finance functions?
- If you have one: What was the most interesting fintech development for you during corona?
- If you have one: What was the most important piece of news in 2022?
Thank you very much for your valuable time and insights. We wish you much success in 2023 and happy holidays!
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Transcript
[0:00] Music.
[0:16] And Live Events operator do you start a podcast and YouTube blog from Germany as well as founder and host of the Woods first,
Tech entrepreneurship radio called startup. Radio
I would like to welcome you to an annual tradition the fintech review Germany Austria and Switzerland 2022 we are airing this on a regular basis on the 25th
off December meaning on regular basis since War
then seven years this is a review of the most important events in fintech from the perspective of our guests keep in mind that since the first fintech review the field has changed and broadened a lot really
lat wait used to be,
on the payment apps now there’s Insurance crypto crop Tech banking as a me banking Capital markets and much much more so we thought we would invite guests from a very diverse background to give,
their perspective on the time of Corona
2022 and an outlook for the next year 2023 we will be more than happy if you would rate and reviews either on YouTube
the podcast app off your choice you’re listening to right now or the internet radio station.
[1:41] I would therefore like to welcome our guests Mary CEO and co-founder of In Smoke.
[1:50] Hello hello Joe doing good excited to be here.
[1:54] Luca CEO and co-founder of the credit platform X alone hey and it’s a pleasure being here.
[2:02] Heinrich CEO and co-founder of crypto custody Bank fee Noir.
Well you and thank you for having me and great to be on this podcast so I’m Heinrich co-founder and co-ceo of berlin-based crypto custodian whenua.
I’m very happy to talk about what happened in 2022 and looking into 23 of course.
And finally our steady guests for the fintech review Frank Schwab who is the co-founder of the fintech Forum and annual event here in Frankfort where,
early stage fintech X get matched with investors as well as multiple supervisory board member including Banks.
Hello how are you are troll I am Frank Schwab I work as a professional board member and I’m also a co-founder of the German fintech for room since 2013
glad to have you all here shall we get started with the questions right away.
[2:59] What was the most important development in the fintech world in 2022.
I think it was all about customer experience because a lot of companies also post covid-19
put a lot of efforts into designing the best customer experiences and it’s a trend that will continue also in the coming
years because we have seen that the Pioneers in customer experience will win the game so I everything about automating processes in providing instant experiences will win the game.
[3:37] That’s a very interesting question giving that 2022 almost feels like a pretty big roller coaster
in my opinion the main shift that we realized was definitely a big shift towards sustainability,
and not only sustainability as in show your alignment with some sustainable development goals but we definitely feel like this is also something that
more and more companies especially when their fundraising or you can companies when they’re borrowing money
we’ll have to start integrating into their business concept into the financial planning so we also see a lot of regulatory pressure in that space
with the emergence of you know and frd that the implementation of other sustainable Financial disclosure regulation so this was definitely something that
was felt very much apart from obviously you know some Market turbulence is rising interest rates and some of the other ramifications this has had on on the lending markets where we’re at.
[4:36] In my personal opinion let me try to not going to go too much into fintech and January I mean they’re very sure you have a lot of great speakers there let me focus on crypto I mean obviously we’ve all seen the news the crypto bear Market hit us.
Quite quite hard this year with ya the infamous ft x call-ups just a few weeks back that obviously set.
The industry into quite some chaos even in subtypes sometime
um and Jana we kind of see the aftermath of the downfall of the exchange see kind of the business models and the market value chain also kind of read,
shuffle a little bit and I think that was clearly the most important development that from our perspective working in crypto was observable.
So from my point of view we have seen a shift from.
Pure growth customer crows Revenue towards more attention to words.
Profitability and.
[5:46] That goes both basically hand-in-hand with cost-cutting so significant release of Staff of various.
Fintech companies startups but as well as traditional paintings.
And probably the most important development in 2022 verse the rebalance of valuations.
But we have seen is that fintech companies and startups who seeking or the we seeking money they still get money,
less than before but too.
Sometimes lower and in a few cases and prominent cases significant lower.
Valuations and I think that,
basically one of the most important do you think fintech has peaked in terms of Investments as some data suggests.
Yeah it looks like that.
20:21 was probably one of the peak years when it comes to fintech investment but even in.
21 there were less companies.
[7:15] But they did get more because we was it way it will be on Barry series,
BCD sometimes even eat and actually that Trend continued into 2822 so even here less companies.
[7:36] Got more but as from and total point of view less companies also got less and for sure at lower evaluations.
I think.
The clan example was one of the outstanding ones were let’s say 80 to 90% of degrees in valuation compared to the.
Um
Financing round before and that created pressure for the whole ecosystem.
But also after let’s say eight years of growth so I’m looking at this.
Ecosystem since 2013 and we had grown year by year so it’s clear at some point in time.
Crow will stop and markets will consolidate so we I think from a technology point of view.
[8:39] It’s still an early Market but let’s say the growth was significant over the last eight to ten years and that now stops and.
Of course the overall situation of the markets doesn’t help.
[8:56] Yes or no I think for the time being that’s clearly yes if you look at the data but that would then somehow also mean that we’ve seen the kind of the end development of.
Finance fintech in general I had so I think we just weathering a global,
recession where you just see a Slowdown in investment in any aspect in any asset class and I mean it’s a late-stage fintech even even more so as a maybe subset of of tech in general.
But what I just don’t believe is that we are kind of at the end of The Innovation cycle rides of
of kind of reshuffling traditional finances still so many stones to be termed if you just look at how the financial system is still build and what
Foundation of this stupid and I think we’ve just seen our first real
maybe 57-year hype cycle of fintech and now we both were downside good question is going to be how long it will be but I’m clearly seeing Innovation and with that also
funding for the right companies in the right business model is coming back in the near future.
[10:10] I would say that Investments especially in fintech and Venture Capital its it Ebbs and flows so I would definitely agree that at the moment or especially the second half of 2022,
was pretty much more in a risk-off environment but we feel like.
[10:27] We still have very good conversations with investors and ultimately I think it’s you know fairly healthy Market shake out in that sense we still see that a lot of very good deals are funded especially if you’re in a hot space,
like AI or ESG we see definitely very good valuations being achieved.
And so I think yes probably there was some sort of peak that we are Beyond as far as fintech
Venture Capital fundraising goes but I think you know good deals and companies with solid fundamentals and growth projections as well as a clear path towards profitability they will definitely still get funding.
[11:09] No because one might say that you know has the hype of fintech and interact like past
but we will definitely see a second wave coming if not the in 2023 then 2024 for sure we will see a lot of new and exciting developments happening and we will see also second wave of Investments coming.
[11:35] What is the next Hot Topic in fintech is crypto making a comeback or are we all looking Edge API tools for embedding Finance functions.
[11:46] Yeah the crypto come back so I think it’s definitely one of the trends.
That are here to stay maybe not necessarily the hype around some independent cryptocurrencies but I believe that,
a lot of investors and also incumbents and the markets like Banks asset managers and so on they’re starting more and more venturing into the into the areas of digital assets,
so I’m not 100% sure about a fully crypto come back but when we’re talking about digital assets the concept of tokenization
and using that in the wider financial markets then yes I definitely think that this is something that is going to be driven forward with.
Do the same amount of resources even more resources and the same amount of interests from all Market participants because it’s fundamentally very interesting interesting Concepts it has clear benefits for investors.
[12:45] Especially when you’re looking at alternative assets you know you can make.
You can introduce liquidity and coolness of markets where it has so far been lacking you can kind of democratize you know investing in alternative assets like real estate or maybe even art and music so we clearly see that,
so in that respect I think yeah.
The Crypto Crypt away for digital asset wave is definitely here to State and if you want to say it’s a compact and it’s going to make a comeback.
[13:19] Yeah I mean embedded Finance is a very big one I mean we’re focused on the fintech lending space and I think one of the key drivers in the embedded Finance ecosystem is ultimately you know.
Bringing Financial products like loans to a wider audience and basically you know creating an easier connectivity and an easier access to financial products for underserved market segments fundus of Borrowers.
And so I think that is in connection with the focus on ESG and basically the impact that you can show and the impact that you could create by delivering Financial products you know to a specific audience or to underserved Borrowers,
I think that has been a very big driver and is continues to be a very big driver.
[14:07] Um I don’t think that it’s an either or question right I think both have their absolute necessity in further innovating the financial markets both.
One very important pillars I mean obviously I’m a bit bias working in the crypto space so I definitely have to say that I think,
we will see a comeback and what makes me very sad say hopeful and positive about this is,
one we start few no I in 2018 right that was in the middle of the last bear Market which then basically took
2022 really come back
and for me it’s been a bit of pitting their did this it’s more about let’s say kids staying calm staying patient
continue on the strategy may be adjusting the strategy where it in the New Market reality needs to be adjusted but don’t lose the overall long-term Vision that you have in place for your business model and
that’s what we’re doing and Fina and that’s why I’m also very positive that we will see a great crypto come back the question is when it will be.
[15:15] The overall situation with crypto for example because of FDX bankruptcy is a little bit sore right now so it will take time for the market to recover,
but again we will definitely see a comeback also on the crypto side we will see new initiatives on the crypto side and until then we can definitely enjoy some
and you success stories everything related to both embedded finance and embedded Insurance because these are the services that the customers are still expecting to use but they are expecting to use them in a seamless way
nobody will go shopping for insurance or or different financial services so they have to be there and present with different other products and services.
So let’s start with embedded I always said.
[16:11] Banking needs to be implemented where the underlying real business happens.
So banking is in many cases a tools for means whether it’s payments whether it’s.
[16:29] Supporting businesses with liquidity or credit so it’s.
It’s an embedded function.
Business wise and it looks like that now we have the technology and Advanced Technologies that we can do it.
Technology wise as well.
So therefore yes in retail at the point of sales.
Embedded will be key because.
[17:07] Let’s say you need the money or you need to pay where you basically fulfill your your demands.
And your wants especially now in Christmastime right you don’t want to go first to a bank to get your money and then going into the shops I delete you can,
let’s say whether it’s online or offline you can handle your banking at the point of sale and I think this is,
not only for payments for payments and now it’s obvious but also for credit and liquidity and who working Capital Loans and let’s say we will see more and more solutions where,
let’s say the financial aspect of the business is embedded as technology progresses and yes.
Not only the next year but the next year’s will enable that.
[18:03] When it comes to crypto.
[18:07] If you look at the crypto Cycles over the last 10 years.
You always had had you had kind of cooling down period of 23 years.
Um that would basically mean we’re in crypto wind and now for the first year or the first one and a half years that may.
[18:36] Take us another year to enter spring so therefore.
I personally believe we need to look at let’s say the applications.
How improved and how convenient they applications are and what are the underlying value.
[19:03] Certain crypto a business model provides and there are a couple of.
Let’s say scenarios and models out there who.
Did they make a lot of sense and therefore.
Even a little bit depends let’s say also on the adaptation of this targets groups I don’t expect to.
For next year that it’s going mainstream as we have seen two years ago.
We’re at least we change from these kind of nerds and very early in a waiters to let’s say early adapters.
These early adapters now out of the market again given also the.
[19:54] Significantly reduce prices so that basically means only the ones they who understand it for real.
And therefore let’s say the applications to use.
Crypto are still in development and they still need to improve,
the convenience as well as the business model by itself significantly so.
I don’t expect significant jumps in 2023 and even for the next.
Two years I personally believe
we need to look at some Niche markets where the adaptation makes a lot of sense a niche market maybe the metaverse the niche market maybe some,
gaming applications with let’s say a decryptor functionality so embedded is the key here as well.
The keyword as well.
And at some point in time we will see especially that when it comes to back office services in the financial industry that the.
[21:06] At application and diffusion of blockchain Technologies and with blockchain Technologies we will see then I can rise of cryptocurrencies,
because they are again and then battered element in blockchain.
Ecosystem so so that that may take longer but once that available.
The whole world when it comes to settlement clearance will make use.
Of this much more efficient technology compared to the current let’s say Legacy.
Systems if you have one what was the most interesting fintech development for you during time of Corona.
[21:59] Um I guess also from a personal experience I think the entire new broker kind of Trent that set in we’re just let’s say everyone,
I saw him on my friends as we started buying stocks and started stock picking which really,
on the mobile phone with a bit of their spare monthly monthly money in the bank right and maybe even a bit out of boredom
sitting at home so I think that was very very interesting development unfortunately one of also see is that a lot of friends have,
lost some money in that in that investment period obviously because we saw the market peeking
end of last year and since then especially in Tech because that’s obviously for a lot of my circle the interesting stocks that that were picked we have the tech stocks been seen tumbling quite a bit.
[22:58] So that was very interesting Market Trend I mean obviously crypto as an investment class also came much more into the spotlight during Corona.
Um and again very similar experience I think especially on the retail side.
A lot of people in Germany would say burnt their fingers by investing and top of Market.
And and then being out of money out of the money very quickly with investment and I think those were the two main factors that I found very interesting in Kerala.
[23:30] Yeah it was not an event it was.
For me it was let’s say the speed of the adaptation rates of digital in general.
So there are countries which lagged behind in.
Digital adaptation of financial services,
and then changed in some countries like Eastern Europe dramatically but even here in Germany where we had let’s say stable,
online usage we have seen significant growth when it comes to.
Online brokerage for example and other Financial online services so even there,
the corona helped to give it a push or so.
At least this was let’s say some kind of progress when it comes to more efficient markets and more efficient Behavior.
[24:39] For us it definitely gave a new opportunity to work on automatization
customer experience and also be embedded Insurance part because we are hundred percent embedded insurance company and it gave us and the whole Market
the whole industry it gave a lot more,
opportunities to collaborate with large Partnerships to leverage on the customer bases of large partners and to really develop
new and innovative solutions to Taylor
new Services together with the Partnerships and and to really enhance the whole customer experience to related to embedded Insurance in the embedded Finance
so I think we saw quite a lot of success stories also with
together with Partnerships together with the embedded insurance and fintech so I think this was the most interesting part and also I think during the corona times the customers born in terms of new products services and the whole experience so much,
because of the optimization and then digitalization of all all the all the products and services that now the incumbents and then Banks were kind of forced to do.
[25:58] If you have one where was the most important piece of news in 2022.
I think the event in 2022 That Shook Up the the whole fintech or financial word was definitely the bankruptcy of the objects we cannot
you know Luke over it because it influence so many funds it influenced crypto Imaging flood stocks it influence absolutely everything because the amount of assets they were holding was just so massive and this is why
at the moment I think a lot of funds
ensure text fintechs are suffering because the world is looking towards like what what is going to happen now next how will the crypto will be influence how the stocks will be influenced and whether how long it will take time
to kind of gain again the trust in investing in different assets so there was definitely a massive influence because of that and I think it will go it was also the biggest news of 2022.
[27:01] Yeah we did come across before I think the clan Arena financing round with degrees of valuation more than 80%,
that’s kind of a very,
strong signal not only for Kleine but the overall Market let’s remember when we talked about fintech.
Nine ten years ago at the beginning it was all around payments right and still a,
and still today payments cross-border payments are still a significant part of the overall fintech ecosystems.
[27:45] Um so.
[27:48] The rebalancing of the valuation brought back to my from from from my perspective,
reality into the overall Market also then beyond the payments fintech but also for many many other let’s say fintech sectors.
Whether it’s.
Loan credit or let’s say Wells or Robo so so all.
All other valuations we’re also let’s say looked at and negotiate it.
On a more realistic and more let’s say market-based.
[28:40] I think one very important piece that somewhat went I felt like below the Raider was the announcement of the crypto
Sav crypto Farnham which essentially was a very important corner piece in Germany
in order to digitize or enable also digital investment vehicles like digital lending funds or digital investment funds and so on because
this really shows that the regulation has
been forming a clear path towards opening up you know digital assets to institutional investors and we see that the regulation is catching up with this new market Trend and this is definitely a very good very important corner piece in order to Foster trust in this market segment and it should also further in my opinion
you know Drive the focus and you know Drive investment into this area.
[29:37] Um elections that again with with a view on the.
On the crypto market and I think that goes a bit in hand with what what was just talked about earlier I think the.
Ft x collapse as in a single event and impact on the perception of crypto as a market as a as an asset class I think that was the single most important news event
2022 and had the biggest impact overall that really even tricking into let’s say the non crypto
and media and non crypto fear of Interest.
[30:23] Thank you very much for your valuable time and insights we wish you much success in 2023 and happy holidays.
[30:33] Well Alyssa from my side hey Delia had with us that it’s an Estonian so happy New Year and merry Christmas everyone awesome thanks so much you and always a pleasure.
[30:43] Happy holidays and happy New Year enjoy the time off with a families.
[30:51] But that also gives the opportunity to rebalance life and and therefore enjoy.
The next couple of days and have a good start in 2023.
[31:11] Music.
