Fintechs, blockchain and banking M&A

Finance panels at Risks & Trends 2018

Starting point

The third edition of Risks and Trends, Polityka Insight’s flagship conference, will be held on Monday, February 5. During the event, we will discuss opportunities and threats to the economy in the year ahead. Over a single day, decision-makers and experts will talk about what lies ahead for Poland and the world in 2018. We will also inaugurate thematic paths in our programme that are linked to our PI Finance and PI Energy services, as well as to technology. In the section devoted to finance, we will talk about trends in the sector – mergers and acquisitions, blockchain and investments in fintechs, as well as risks related to eurozone reform.

Key points

Fewer banks on the market. Growing number of regulations, stricter capital requirements and low interest rates have forced banks to change their business strategies. Small banks often have to comply with the same rules as their larger rivals, which significantly affects their profitability. This has turned into a years-long trend of takeovers on the domestic market – over the last eight years, 14 commercial banks have disappeared in Poland. Will 2018 bring further acquisitions? Which banks will remain on the market and which might be taken over? We will talk about this with Paweł Borys, the President of the Polish Development Fund.

Blockchain set to change the financial sector. Blockchain, or a distributed database, is one of the most popular technologies of recent years. It formed the basis for the most popular cryptocurrencies, such as bitcoin or ethereum. Still, the use of distributed databases is much wider – as a result, technology and insurance companies, banks and public administration have been taking a closer look at this technology. Will 2018 bring success in the commercial use of blockchain? How can this technology change the activities of Polish banks? We will discuss this with Magdalena Borowik, Transaction Technologies Adviser at MinDigi.

Fintechs become banks’ rivals. Once the Payment Services Directive (PSD2) and its technical standards come into force, non-banking entities will gain access to client data processed by banks. New fintechs will form on the market while existing ones will expand the range of offered services. Start-ups will compete with financial institutions and offer payment services and loans. Could they threaten banks? What strategy should financial institutions choose towards fintechs? Try to acquire them or rather compete with them? We will talk about this with Tomasz Czechowicz, chief executive of MCI Capital.

The need to reduce the threat of crisis. In 2017, the eurozone countries developed at the fastest pace since the global recession. They have now left behind a period of a long-term stagnation and fiscal crisis, the latter one for good. Institutional changes introduced in recent years, which include the creation of a banking union, implementation of mechanisms that help monitor macroeconomic imbalances, have increased the stability of the eurozone and its resilience to external shocks. Nevertheless, much remains to be done to ensure that the fiscal crisis does not recur, so that the remaining EU member states can safely and confidently adopt the common currency.

The next step in fiscal integration. EU leaders have to deal with a challenge of deeper fiscal integration. The introduction of a common budget, the harmonisation of tax policy, and ensuring compliance with Maastricht rules by EU countries has been met with political resistance. Most member states want to maintain autonomy in conducting economic policy. The reform of the eurozone will be discussed by Agata Gostyńska-Jakubowska, Senior Research Fellow at the Center for European Reform, Anders Åslund, Resident Senior Fellow at the Atlantic Council and Deputy MinFIn Leszek Skiba.

Adam Czerniak contributed to this analysis.