FinTech is a young industry that is quickly developing and attracting substantive investments. According to Marketwatch, the approximate value of the global FinTech market will reach $305.7 bln by 2023, expanding at a CAGR of 22.17% between 2018-2023. This becomes possible due to several factors – the rapid growth of the e-Commerce sector, heavy banking digitization triggered by the global COVID-19 pandemic, and mass view changes of how financial services can be provided.
Thus many companies started looking to develop their FinTech solutions. That’s how FinTech hubs appeared and gained popularity by attracting the best tech experts and providing successful tech innovations. In Eastern Europe, among fast-developing FinTech hubs, it’s worth considering Poland and Belarus.
Being the world leader in IT services export per capita, Belarus is working on the development of its FinTech ecosystem. The ecosystem is quickly growing and already accounts for more than 100 FinTech companies.
Meanwhile Polish FinTech is one of the most rapidly growing sectors in Central and Eastern Europe (CEE). In 2016 the Polish FinTech market was already estimated at 856 mln euros ($994 mln), making 39% of the FinTech market in Europe. And in 2021 The Global Financial Centres Index (GFCI) ranked Warsaw, the capital of Poland, as the 56th major Financial Centre in the world.
In this article, we’ll look at why Poland has become a major FinTech software development hub in the CEE.
The Polish legislative system sets high standards for its FinTech sector. The FinTech companies have to follow the regulatory norms of Poland and European Union (EU) directives. At the EU level, Polish FinTech developers have to align their digital solutions with various EU directives, including PSD2 regulations, Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF), General Data Protection Regulation (GDPR), Markets in Financial Instruments Directive (MiFID-2), and others.
The General Data Protection Regulation is one of the most strict privacy and security laws among all the listed above. It helps EU citizens to better control the use of their personal data by businesses and organizations online. Meanwhile, software developers have to consider the data protection techniques and data collection methods they embed in their digital solutions.
The necessity to align their software with the Polish and EU regulatory requirements represents a major challenge to the Polish FinTech companies. For this reason, Polish legislators and the Polish Financial Supervision Authority KNF (Komisja Nadzoru Finansowego) are working on the legal instruments that would help to facilitate the development and implementation of FinTech software and attract more investors. For example, the KNF is running the Innovation Hub Programme where FinTech companies can receive consulting support on the development of secure FinTech solutions with adequate client protection and suggest their improvements on the legislative system so that it satisfies the needs of both – the FinTech companies and their customers.
The largest FinTech sector of Digital Payments in Poland has reached $40,965 mln in 2021 and by 2025, the value of electronic transactions is expected to rise to nearly $79 billion. With all that in mind, according to MDPI’s latest research, Polish consumers are eagerly adopting various digital payment options such as contactless payments, mobile payment systems, digital wallets, etc.
According to Statista, the number of FinTech companies in Poland has been systematically increasing from 167 FinTech companies in 2018 to 273 companies in 2021.
Despite its rapid growth, the FinTech sector in Poland is rather young. It mostly includes the FinTech SMEs with experience of 1-5 years in the market.
There are three main sub-sectors for FinTech: banking, insurance, and payments.
The most common services provided by FinTech companies in Poland are related to electronic payments, financial platforms, loans, credits, cryptocurrencies, transactions, data analysis (credit scoring), machine learning, crowdfunding and P2P.
Polish instant transfer solutions such as Express Elixir and Blue Cash are widespread in EU countries as they provide fast and secure payments.
The Polish payment system BLIK deserves special attention. This innovative solution allows users to perform any type of payment from withdrawing cash from ATMs with smartphones to making immediate money transfers to other users without knowing their bank account numbers. The system is used at the national level and it complies with all the international standards for making fast purchases. According to Statista, the number of e-Commerce transactions in BLIK alone has significantly grown from 2.3 mln in 2016 to 105.5 mln in 2020. Whereas transactions via ATMs, payment terminals, and P2P between phones have also increased in the system.
The swift adoption of FinTech solutions across Poland offers great benefits to those companies that consider outsourcing the creation and testing of their FinTech applications to this country. Many world-leading FinTech companies are already using the potential of Polish FinTech infrastructure. They outsource the development of their FinTech products to Polish software developers, leveraging the best FinTech development practices in their apps and gaining access to the most remarkable software development talents.
The Potential of Polish Programmers
Poland is one of the most attractive IT outsourcing destinations that offers outstanding development opportunities. This country is known for its skilled IT professionals who develop various types of software, including FinTech solutions for their business partners from the EU and US.
World-leading IT companies open their branch offices in Poland. In 2015 Google started its Campus Warsaw, the 5th Google campus in the world and the 1st among CEE countries. Microsoft launched its training center in Poland in 2017 is expected to invest $1 bln to build a new data center in this country.
Polish software developers are highly ranked at world-class software development competitions. For example, TopCoder ranks Polish developers among the top 5 most skilled programmers, while Hackerrank lists Poland among the top 3 countries with the best developers.
Conclusion on FinTech Industry in Poland
Polish FinTech is one of the most quickly developing industries in Eastern and Central Europe. It has everything to become a world leader in FinTech development – the Polish government is working on adjusting its legislative system to the needs of the FinTech sector while banking and financial institutions are developing prominent FinTech apps and systems and leverage them in the internal market.
In these conditions, the FinTech industry forms the most outstanding FinTech talents with much practical experience and necessary expertise for building the most remarkable FinTech solutions. Therefore, those companies that outsource to Poland their FinTech projects obtain efficient products empowered by the latest tech innovations.