Fintech Trends in the EU. The Good, the Bad, and the Ugly

Today, the growth of the fintech sector is not only about the number of new start-ups. Fintech also expands as a field including new concepts and encompassing global trends. It also opens up to more groups of people who can try out new financial products and services due to this expansion and constantly improving UX solutions.


It seems that this growth is also sustainable. Great effort is dedicated to making the fintech sector more resilient than ever. It’s clear that many barriers have been crossed and today fintech is far beyond just providing everyday money transfers.


New trends gaining track in the EU


Along with the widely-applied blockchain technology, crowdfunding is one of the hottest trends which is here to stay. It even led European Union to the directive that makes operating easier for a vast number of companies.


According to Lithuanian Crowdfunding Association expert Jaketerina Govina, demonstrating agility and efficiency in distributing funds, the crowdfunding platform operators proved to be reliable partners for both businesses and governments. Having extensive experience in financial sector regulation of the EU, she notices the attention of the organization and a chance for crowdfunding to play an important role in Europe in the future together with wealth tech and green finance.


“The new EU crowdfunding regulation will bring additional kick for the creation of a united and resilient EU market, that will contribute to the EU capital market ambition,” says Govina.


Digital currencies – opportunities and challenges


More and more central banks are focusing their research and pilot projects on digital currencies. This means there is a chance that in the longer term we could see digital currency implementation. However, where there are opportunities, there are also challenges.


Janis Berzins, Lead of Sales at Accenture Baltics, says: „I see a number of challenges for fintech service providers, because in fact as many as 40 countries have already banned or restricted the usage of cryptocurrencies.“


There is a growing confrontation between governments that want to keep the national currency because of its strategic value and central banks which are seeking to digitize the currency to keep an advantage against its competitors like cryptocurrencies. Because of this, we are likely to end up at a crossroad between regular currencies and their digital versions.


Digital natives: who, when, what do they want?


Melinda Havas, Head of Business Development and Marketing at ff. next, elaborates on the role of younger generations: millennials and gen Z. A major difference between the millennials (born between 1980 and 1995) and Gen Z (born between 1995 and 2009) is that millennials are not digital natives, while Gen Z is.


However, Melinda notices that despite the differences, there are also links that connect these generations. They both:

- view the world as a small and highly connected ecosystem,

- search for trust and community,

- are not constrained by physical proximity,

- highly rely on their peers’ opinions.


Although some were kids and others were already teenagers, they all lived through the period when smartphones were getting mainstream and smartphone-based companies like Uber or Spotify entered the market.


These mobile experiences and user-friendly solutions have set a certain standard. Already used to it, millennials and gen Z only accept similarly seamless experiences regardless of the sector – finance is expected to be as easy, as booking a hostel.


ff. next research shows, that lessons learned in the tech sector are just as important for fintech of today as digital natives are a growing part of their client base:

- when communicating, visual representation is the key,

- the border between entertainment and communication is blurred,

- creating a community interface is necessary as friendships and peer groups have the greatest impact on millennials and gen Z,

- familiar design patterns and elements like the iconic hamburger menu are needed to get to them.


Starting early for lasting financial safety


Although cheap rides and simple apps are nice, new business practices and digital solutions are the most important when they help people attain important, sometimes even lifelong goals. Becoming financially independent is a challenge for gen Z and gen alpha (those born after 2010), so this is what fintech needs to seriously look into.


According to The London Institute of Banking and Finance, less than two-thirds (64%) of the young people receive financial education at school and there currently is no improvement. To increase their financial consciousness, youngsters must be involved in financial education early on. The best way is to set them for learning-by-doing, but that requires developing services that can be used easily and intuitively.


A great example is an app called Strive - a crypto-fuelled family banking solution designed for parents and kids. It lets parents show their crypto wallets to kids as well as assign chores and manage pocket money. Kids can set up goals and collect rewards. Strive is a way to have money talks in a fun and interactive way providing a safe and controlled environment for exploration.