The Fintech ecosystem in Spain


According to the report “Impacto, innovación y tendencias Fintech” (“Impact, innovation and Fintech trends”), prepared by the firm Finnovating last year, Spain ranks sixth in the world in the ranking of countries that host Fintech start-ups. 

With more than 400 Fintechs in Spain, the country’s ecosystem is considered to be increasingly consolidated. Not only has it carved out a niche for itself in the main Spanish cities, but its scope of action and projection is reaching ever higher levels. Although the Community of Madrid and Barcelona are at the top of the scale, other regions such as the Valencian Community, Andalusia and Galicia play an important role in this sector. 

View the Fintech Map in Spain HERE

Turnover in this sector exceeds 100 million euros and employs more than 5,000 workers. The verticals with the highest penetration, according to the report “Observatorio de la Digitalización Financiera Funcas – KPMG” (Financial Digitalisation Observatory Funcas – KPMG) – within the number of sub-segments included in fintech – are loans (28%), payments (19%) and investment (16%). 

Today, more than half of the customers of most Spanish banks are digital. This is proof of the transformation and consolidation process that has recently taken place in the Spanish banking business. Thus, it is estimated that 75% of Fintechs in Spain actively collaborate with companies in the traditional financial and banking sector, and it is expected that in the long term this collaboration will be even greater, according to the previously mentioned Finnovating report. 

From a regulatory point of view, on November 4th, 2020, the Spanish Senate passed the draft law for the Digital Transformation of the Financial Sector that introduces a suitable legal environment to ensure that innovation in the financial sector can be developed in an efficient and safe manner for users. In terms of regulation and supervision, it represents one of the greatest innovations made to date by the supervisory authorities, since the ultimate goal of the Spanish Sandbox will be to support the development of innovative projects under a legal and secure framework, which, due to the novelty of their business model, are unable to find a place in the current regulatory framework. 

Also, recently, the Spanish Government has presented the draft “Startup Law”, which aims to consolidate in the country a “hub” for the attraction of innovative companies, in addition to attracting talent and investment to Spain. This law contemplates measures such as the reduction of corporate tax from 25% to 15% for 4 years, deferral of tax debts, and exemptions for company stock options, among other advantages.

Spanish Regulatory Sandbox

For Fintechs, presenting a project into the Spanish Sandbox is the opportunity to demonstrate and evaluate its feasibility from a business and regulatory point of view under the supervision of the competent authority (CNMV, Bank of Spain or DGSFP). The objective is to launch products or services in the market that may not be offered today because there is a regulatory brake, and thus, an impediment to be able to operate in the market with legal certainty.

In the first call, the first 18 projects were selected, and a second call is scheduled for September 2021, with a deadline for submission of applications until October 23 of this year. 

Associations and entities that promote the development of the Fintech ecosystem in Spain

INNSOMNIA was born in 2016 as a new way of understanding the acceleration of startups and the digitalization of companies. Created by a team of professionals with more than 10 years of experience in different areas of innovation, the firm has become a technological hub in Spain, specialized in co-creation processes between corporations and startups. With an ecosystem of more than 2.000 startups and a clear leadership in the promotion of fintech and insurtech projects, it has become a key partner for the launch of important international projects in Industry 4.0, Agritech or Smartports. INNSOMNIA’s model differs from the rest of accelerators and incubators, betting on replacing direct investment by making available to entrepreneurs the best conditions for growth, connecting their projects with large companies to incorporate the latest innovations to their business. It is a unique collaborative model, in which entities such as CaixaBank, Puertos del Estado Santalucía, Michelin, Generali, Telefónica or GlaxoSmithKline, among many other companies, have already placed their trust, and which is based on four pillars: non-equity model, co-creation, open innovation & B2B.

From its headquarters located in Valencia, the firm works with a global vocation and with the conviction that entrepreneurship and good ideas have no borders. For this reason, around 40% of the startups that form part of its network are international and come from 56 different countries. This search for talent is also reflected in the signing of bilateral agreements with other major accelerators as well as in the participation in various programs and in the creation of The Talent Route, the first European network of fintech and insurtech accelerators, which in turn brings together more than 3,000 startups from 12 different countries. Luxembourg-based LHoFT is part of this project.

Finnovating is the first Matching as a Service B2B platform that connects FinTech, InsurTech, and PropTech sector with investors and corporations globally. Its main goal is to allow the members of the ecosystem interact with each other effectively. In short, Finnovating is the LinkedIn of the FinTech world. Each company has its own profile and has a number of tools at its disposal:

Discover & Connect: a search tool, where a huge database of banks, corporations and investors can be accessed and makes it possible to connect with them.

Match: a unique AI algorithm that allows companies to connect with each other with great efficiency.

Challenges: a tool for co-creation and collaboration of open innovation projects. Companies can publish projects or participate in those that are available on the platform.

Marketplace: a space where FinTech services can be offered and purchased, divided by country and activity.

The platform is already positioning itself as an international lever for digital acceleration, with almost 3,000 companies from more than 60 countries.

The Spanish Association of Fintech & Insurtech is a national association that was born with the aim of creating a favourable environment for the development of Fintech and Insurtech startups in Spain, discussing, communicating and collaborating with the relevant organisms and agents of the Spanish Financial System to foster growth and improve the Fintech ecosystem. The association’s methodology focuses on Fintech and Insurtech representation through vertical groups led by specialized coordinators. It also has a research area for the development of projects that facilitate the revitalization of the sector and allow the sharing of good industry practices. 

In addittion, Spain offers multiple programs dedicated to the acceleration and development of new Fintechs, mainly promoted by the private sector and more specifically by financial institutions. Among the main ones are  Bankia Fintech, Fundación Bankinter, BBVA Open Space, Caixa Dayone, Innsomnia Fintech, Santander Innoventures y ABANCA. 

From the public sector, initiatives such as Rising Up in Spain, promoted by ICEX España Exportación e Inversiones, through its annual calls, promote the establishment of international startups and Fintechs by providing them with institutional and financial support to position them in the sector and promote their international development from Spain.

In terms of activities aimed at the Fintech sector in Spain, the country offers a wide range of events focused on business development, networking and identification of international investors. The above-mentioned organizations are the best source of information to keep abreast of the calendar of events and activities. 

Rising Up in Spain

ICEX España Exportación e Inversiones,  through this program, supports the establishment in Spain of foreign startups, facilitating all phases of the process of establishment and development of entrepreneurial projects in the country. 

The program is aimed at foreign and Spanish non-resident entrepreneurs who have an innovative project that has already received positive feedback in the market.

Mobile World Congress

The Mobile World Congress is one of the most important technological events worldwide. Organized in the city of Barcelona, this forum brings together the main companies and professionals in the telecommunications sector, and focuses, through presentations and debates, on the future of the industry and the impact of new technologies in all areas of the economy. 

Fintech also has its space at this event, and offers an exceptional framework to identify potential investors and business opportunities at a global level.

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