In Turkey, finance and technology approaching each other in development
ANKARA - Anadolu AgencyA new breed of Turkish financial technology company (fintech) is bringing cutting-edge high-tech solutions to customers at banks and financial services companies.
While London and Berlin remain the main hotbeds of fintech innovation, Turkey is increasingly seeking to compete, experts told state-run Anadolu Agency.
“Turkey seems to have a deeper-rooted and more organic approach to innovation,” said Lu Zurawski, the head of Consumer Payments EMEA at ACI Worldwide, an international banking and payments specialist.
“Banks in Turkey are recognized as fast adopters of technology. The relationship between Turkish banks and fintech seems to be more collaborative and symbiotic,” Zurawski added.
Banks in Turkey now offer branches with no tellers, as consumers access their accounts and even make loans at computer terminals. Some Turkish banks automatically give customers a service number with a scanner device, while some Turkish ATMs ask customers for their mobile phone’s identification number in order to grant access.
“Today, the rapid advance of technology and clients’ swift adaptation have brought the technology and finance sectors closer, marking the emergence of the fintech sector in Turkey,” said Ayse Nil Sarıgöllü, the CEO of the Istanbul-based chip and payment technologies specialist Cardtek.
“Our country is very open to innovations in payment systems. Consumers learn fast and have bigger demands. We at Cardtek have ongoing projects on mobile payment, wearable technologies, cloud-based systems and smart city solutions,” Sarıgöllü added.
The transaction value in the Turkish fintech market is growing at a rate of 19 percent per year, according to researcher Statista, which forecasts that in 2016 the market will be worth $19.6 billion. That number is $118 billion in Germany, but there it is only growing at around 10 percent per year.
“Turkish fintech is growing at an extremely rapid rate, thanks to the robust financial infrastructure in Turkey that provides the opportunity for young fintech companies,” Sean Yu, the founder of Parasut, which offers online financial management for small and medium-sized companies, told Anadolu Agency.
Because a majority of Turkish consumers are online, most seek to bank online and Turkish banks have for the past five years competed to satisfy client expectations in this respect. The result, as a September 2015 report from the international retail bank BBVA noted, is that Turkish consumers are offered a wide variety of online and electronic services, many of which are not available even in more developed countries.
The main challenge for Turkish fintech is the need for updated legislation, stated Yu.
“Legislation governing customer data - where it is held and how it can be accessed - remains unclear,” he said, adding that this makes it difficult for fintech companies to determine how data can be used in cutting-edge solutions, utilizing new platforms like the Cloud.
Despite these challenges, Turkish fintech is “punching above its weight in terms of investments and transaction values,” ACI Worldwide’s Zurawski said.