By Evita Lune, PhD, Partner, Global Head of the FinTech Practice Pedersen & Partners

May 20, 2024 - Helsinki

Nordic FinTech Summit is on my agenda every year due to an opportunity to see my Nordic clients and candidates all in one place and learn what’s cooking. Thank you, Ola Sundell and Janne Salminen for making this happen!

The most successful Finnish Fintech Multitude was announcing superb quarterly results today, so it was very challenging to juggle between the two events. My humble suggestion would be to bring someone from Multitude or CapitalBox to the stage to hear real achievements from the best. Jokela Jorma, Mantvydas Štareika, Antti Kumpulainen, and Kristjan Kajakas actually developed a profitable, well-funded, well-governed group of challenger companies.

Some promising ventures to watch in Finland: Coinmotion led by Antti-Jussi Suominen educates crypto enthusiasts to work with crypto for long-term wealth creation. Luckily, with MICA regulation in the upcoming years, the platform will be available for European investors from outside Finland. While one may think that more is better, Coinmotion scrapped the cards and payments business to focus on the core.

It was good to see Latvian FinTech entrepreneurs like Armands Liseks taking the stage and kicking off new ventures. The success of Latvian online lenders and associated businesses is underrated, probably due to their focus on other markets than Nordics. There is a lot inGain can offer to non-finance industries looking to innovate their offering with financial products.

Georg Hauer reconfirmed the future of banking being customer-centric, with consumer retail brands in front and BaaS solutions in the back and that emerging markets have jumped over the branch banking stage: from unbanked directly to mobile banking. The banks, which choose to ignore the trend will most likely end up like Nokia phones versus Apple. Juha Keski-Nisula from XMLdation discussed how to view CBDCs from a Fintech Perspective and finally taught us all what FinTech really means: Finnish Technology 😊.

By Evita Lune, PhD, Partner, Global Head of the FinTech Practice Pedersen & Partners

June 6, 2024 - Amsterdam

AI and Generative AI are high on the agenda both with incumbent banks and FinTechs. AI is used for daily functions in client onboarding, CRM, collections, and customer proposition development, while generative AI makes the internal processes easier and more tools become available, as highlighted by Marnix van Stiphout, ING and Joanne Hannaford, Deutsche Bank.

In the era of personalization when all different service providers know so much about everyone, there is a risk of overpersonalisation, or the phenomenon that we never like about our mothers – they tend to wand to know too much. Mastercard hosted a stage about that.

Baltic regulators are particularly favorable for FinTech ecosystem development including crypto exchanges, EMI-licenced companies and neobanks. Jēkabs Groskaufmanis (Invest in Latvia) as well as neighbors from Finance Estonia and Invest in Lithuania were there to convey the message.

Bunq announced on the stage a partnership with Mastercard open banking. Now all Bunq customers will be able to add all their banking Apps on Bunq and manage their expenses and budgets with the support of AI assistant Fin.

Incumbent banks are pretty happy about their achievement in digital transformation and do not seem to be disrupted by FinTechs. From several stages I heard the same message: FinTechs never really disrupted us and never will. They are nice support to the system, ecosystem players, suppliers, and nothing more.

*On the photo: Evita with Emin Can YILMAZ, Founder and CEO, Param; and Amit Malik, Associate Director at EBRD, Member of the Supervisory Boards at Aion and Vodeno.

Evita Lune, Partner and Global Head of the FinTech Practice Group at Pedersen & Partners, will be speaking at the FinTech Board Members Academy workshop: Empowering Excellence, on January 25-26, organized by the Baltic Institute of Corporate Governance and Fintech Latvia Association.

The inaugural edition of the "Fintech Board Members Academy: Empowering Excellence" will be held on January 25-26. This meticulously crafted, two-day, in-person event is tailored for industry leaders, bringing together over 10 local and international speakers to provide comprehensive insights into critical topics shaping the future of the fintech industry in Latvia.

The Academy is organised by the Fintech Latvia Association in cooperation with the Baltic Institute of Corporate Governance and will help you understand the expectations of the Regulator and get insights from industry professionals as well as established market participants on how to fulfill those expectations in a compliant manner, including topics like establishing a compliance and internal control system, creating an effective governance structure, risk management, etc.

For more information about the Academy and to register: fintechacademy.lv. Admissions open until 22 January.

By Evita Lune, PhD, Partner, Global Head of the FinTech Practice Pedersen & Partners

The past couple of weeks in Vietnam have been incredibly intense, marked by a rich cultural experience and eye-opening business encounters. I've been collaborating with my FinTech client here while also connecting with our team.

On one hand, Vietnam stands out as a rapidly expanding economy with a youthful population of 97 million, drawing significant interest from American, Japanese, and Chinese investors. Moreover, there's a substantial number of underbanked customers, widespread smartphone usage, high internet and social media penetration, all against a backdrop of a notably low GDP per capita at $3,757.

On the other hand, it's important to acknowledge that recognizing an opportunity doesn't necessarily guarantee success, as seen in the case of a few neobanks; in fact, quite the opposite.

The National Bank of Vietnam refrains from issuing licenses to neobanks. Consequently, most FinTech scale-ups must function under the license of a universal bank. This intricate regulatory framework hinders the establishment of true neobanks, mainly due to the sluggish processes involved and reliance on third-party procedures and approvals. There's an oversaturation of wallet and app-based offerings, primarily focused on brokering discounts. Therefore, the development of neobank wallets seldom presents a promising business case.

The lending sector, on the other hand, holds substantial potential. However, obtaining the necessary license comes at a steep cost, approximately $40 million, rendering it unaffordable for many. Those who venture into lending without the proper license have faced severe consequences, including imprisonment.

Both wallets and traditional banks have delivered suboptimal user experiences, marred by bugs in service delivery, limited operating hours (lacking 24/7 availability), and a significant bank run incident in 2022 due to severe liquidity issues. These events have eroded the trust of potential clients.

For foreign investors, the recommendation here aligns with that for other emerging markets: it's essential not to be reliant on the legal system. In the event of a dispute with a local company, winning a court case is highly unlikely. For most of local businesses, the shareholding structure might be: someone from the tax office, someone from the police, someone with the money and someone who knows how to run this business.

Despite these challenges, I am undeniably planning to return, not only for the market opportunities but primarily for the people. Despite a relatively recent tumultuous history, the majority of the Vietnamese people are exceptionally kind, optimistic, and forward-thinking. The expat community, too, has been welcoming and eager to collaborate, fostering a special bond that can be truly appreciated when you're so far from home.

Evita Lune, our Global Head of the FinTech Practice Group, attended the FinTech Forum in Amsterdam and gained valuable insights into Europe’s payments ecosystem. Key topics included the upcoming regulation for instant payments, the open finance framework, and the SEPA Payment Account Access scheme. The event also covered the state of FinTech funding in Europe, the impact of the ECB interest rate hike on banking and neobanking business models, and the consolidation in the BNPL sector.

Amsterdam is always a good idea! Last week, I had the pleasure of attending the FinTech Forum in Amsterdam. It was a great opportunity to network with FinTech professionals and experts who are passionate about expanding their business out of the heart of Europe. Here are some of the key takeaways:

🌍 Instant Payments Regulation: The EU Commission is working on a regulation that will ensure that instant payments are available across the EU by 2024. This will create a level playing field for payment service providers and enhance consumer protection and convenience.

🚀 Open Finance Framework: The EU Commission is also working on a framework that will go beyond open banking for payments and enable data sharing for other financial services, such as WealthTech, InsurTech, credit scoring, etc. This will create new opportunities for innovation and competition in the financial sector and empower consumers to access better and cheaper services.

💡 SEPA Payment Account Access Scheme: The European Payments Council is implementing the first rulebook for the SEPA Payment Account Access scheme, which will enable payment service providers to access payment accounts held by other providers. This will facilitate crossborder payments, increase interoperability and efficiency in the payments market.

💼 Dutch Payment Association: I was impressed by the role of the Dutch Payment Association, which represents the interests of payment service providers in the Netherlands and works for an optimally effective, safe, reliable, accessible and socially efficient payment system. The association also plays an active role in shaping the European payments landscape and promoting innovation and collaboration.

💰 FinTech Funding: One of the topics discussed at the event was the state of FinTech funding in Europe. It has reached an all-time low since the pre-Covid period. Luckily for me, I have been working mainly with profitable FinTechs who have been able to grow organically and sustainably.

🌐 ECB Interest Rate Hike: Another topic that sparked a lot of debate was the impact of the ECB interest rate hike on banking and neobanking business models. Some argued that higher interest rates will benefit traditional banks that rely on net interest income, while others claimed that neobanks will be able to adapt and offer more value-added services to their customers.

📈 BNPL Consolidation: The event also covered the consolidation trend in the BNPL (buy now pay later) segment, with Klarna being one of the leading players. A study showed that Sweden, Romania, Poland, and Italy are leading the way in terms of number of customers who have been using BNPL services. However, some challenges remain, such as regulatory uncertainty and consumer debt issues.

Evita Lune, Partner and Global Head of our FinTech Practice Group, shared her insights with the Nordic Fintech Magazine during the Nordic FinTech Summit in Helsinki. Watch the video to learn more about the challenges of attracting and retaining top FinTech talent, discover what brought Pedersen & Partners to this prestigious event and find out how Evita describes the Nordic Fintech ecosystem in just three words.

In this edition of the FinTech Innovator Chats, Partner Evita Lune is joined by Kimmo Rytkönen, serial entrepreneur, co-founder and CEO of Income marketplace. Evita and Kimmo discuss the potential of peer-to-peer lending, what "skin in the game" means for marketplaces, how Decentralised Finance (DeFi) will affect the industry, and why Kimmo’s expansion strategy has been global from Day 1.

by Ieva Jātniece

There are women in this world who are very inspiring, and who lead by example. One of these women is Evita Lune – PhD in Economics, Partner and Global Head of FinTech Practice Group at Pedersen & Partners, and Speaker at the Līdere Forum. Evita Lune has been working internationally for years, recruiting high-level executives for various companies. However, her professional success has not diminished her feminine charm. “Don't let stereotypes influence you!” says Evita.

• Follow the path your character has given you

By nature, I am an energetic and impatient person, so naturally I have tried many different things in my life. However, it has always seemed important to me to achieve outstanding results in whatever I do. I have worked for Shell, been the director of the EMBA program at the Stockholm School of Economics in Riga, and co-owned a fashion store. For the past fifteen years, I have been a Global Partner in the high-level executive search company Pedersen & Partners. If you do the best you can, life will constantly offer you new career opportunities. 

• Be aware of your internal obstacles

I used to lack an objective self-assessment of my abilities. I was too modest in my demands, and my tolerance was too high – I tried to work with colleagues who do not keep their promises, or clients who were not always professional. It is common for many women to underestimate themselves, and fail to speak up in situations where something is not going well. For this reason, it is important to be aware of such obstacles, and to build your career and circle of clients more purposefully in the future.

• Do not stay in the shadows

Not all people can be leaders, and not everyone has to take a position that causes them great discomfort. However, I often see fear and internal insecurity holding women back from taking the lead in the first place. I would like to encourage women to rise through the ranks, because leaders have more influence and power: if you have talent, if you are a smart, diligent, responsible person with high ethical standards, then do not stay in the shadows, but take responsibility and move yourself forward! By doing this, you will not only have more power over your own life, but you will also positively influence others.

• Everything is dependent on your inner drive!

I work in the executive search industry, where I see that we are most inspired by people who are full of enthusiasm and passion. In their presence, others also want to do more and achieve more. A good leader is one who is able to inspire, to present the vision and direction in which the company should go.
At the same time, a good leader should not be neurotic or chaotic, one day in a good mood and the next in a bad mood. Instead, a good leader has stable energy and a clear direction, and understands that expressing emotions is inappropriate in a professional environment – just like discussing personal problems or talking about people behind their backs. This applies to both sexes, of course!

• Families help you to achieve more

It is a myth that female executives are unable to have both a career and a family life. I have a lot of colleagues who are divorced or childless, and sometimes it seems that more can be done at work if you do not have family commitments. But this is not the case: I see that people who have failed in their personal lives are often less professionally motivated, less organised and less achievement-oriented than those whose lives encompass more than work. I myself have participated in the upbringing of my husband’s two children, as well as the two children we have together. In total, my husband and I devote a lot of time and energy to these four children, but it has not hindered our careers. People with children are very organized and motivated – we are able to evaluate priorities, and we do not waste time. Moreover, we cannot afford to poison ourselves with bad choices or self-destructive actions – we have to live long and support the next generation. I am convinced that having children only benefits our careers and achievements.

• Do not let anyone lie to you

I have heard it said that strong women make men weak, but I cannot imagine why a self-respecting woman should ever choose a weak man. The men in my life have certainly not become weaker by associating with me – quite the opposite! I’m not just talking about my husband, who has always known what he wants to achieve and lived his life with purpose, but also my business colleagues – I have raised the quality bar for quite a few. A woman who creates constructive competition also helps to raises the standards for the men around her as well.

• Know your contribution

Our country is too small to expect only the men to provide economic prosperity. If we use the opportunities given to us by our country to study, receive medical services, ride public transport and the like, but we choose to sit on the couch and not work, we are endangering the freedom of Latvia. It is an irresponsible attitude towards our country: we cannot export oil and gas, so we must export our intelligence. And women must contribute!

• Attitude is everything

Different companies have different internal work cultures. However, it must be kept in mind that in workplaces where employees are humiliated and insulted, quality decreases over time – the best employees will leave. In the long run, companies with ethical values will win out.
I have also noticed that employees work more enthusiastically in companies where the work aims to bring greater benefits to society as a whole. This encourages employees more than standard business practices. 

• Never stop learning

If you do not want to fall out of the professional environment, you need to learn technology. The use of digital tools has dramatically changed the world, and the way we work. Currently, the basics of economics are being thoroughly disrupted – with the use of cryptocurrency, every company can build its own economy.
You don’t have to be an IT specialist, but you must understand what technologies can achieve in a company and in a country, and how they affect all economic processes. Those who know how to use IT will definitely succeed, and surge ahead of those who do not, both in terms of personal career and the wider economy.

• You need to relax in order to be efficient

My hobby list is longer than my work list! My hobbies have given me the energy to go on frequent business trips, meet people all the time and sell services on a global scale. I have been water skiing for fifteen years – as often as five times a week on summer evenings – and I practice yoga every day without exception. As a family, we ride bicycles, SUP boards, and go on boat trips in the summer, and in winter, we all go downhill skiing. I have also been a winter swimmer for years. All of these activities help to clear my head and absorb energy for new jobs.

• Suggestions

For your first job, I definitely recommend choosing a large organisation that can serve as a good learning opportunity. My first job was at Shell – this experience was like a professional guide to business. Once you have learned everything you can from your first placement, you can experiment further.
Finally, it is important for new employees to understand that material evaluation comes as a reward for working with an open heart. In the beginning, the work must be of excellent quality and the client must have a great experience – only then they will want to cooperate again and pay higher fees. It never happens the other way around – I cannot ask for a lot of money and only then try to do something great!

Riga, Latvia – Evita Lune, Partner at Pedersen & Partners, talks to Anniina Brusi, Country Manager at Ferratum Group, for Riga TechGirls.

Anniina Brusi is known as a high-energy Agile leader, who pushes things in the right direction, and finds opportunities instead of waiting around. She has over eleven years of leadership and management experience in the Finnish banking sector – primarily in sales, marketing, e-commerce, and product development. In recent years, Anniina has been working in FinTech companies such as Nets, Ferratum Group, and Zmarta Group, creating and providing better digital financial solutions for the consumer market.

Why did you choose a career in technology?

My move into FinTech was a natural career switch after ten amazing years in the banking sector. I’ve been privileged to work in different parts of the consumer banking sector, and have seen the industry from different perspectives. I have observed various twists and turns in the industry: the 2008 financial crisis, some major bank M&As, digital transformation, and now the coronavirus pandemic. These changes have broadened my knowledge and understanding, and have also provided wonderful experiences. 

The FinTech field is a lot bigger than I thought. Essentially, FinTech is all about service and product design; I would say that it breaks old and rigid processes in the financial industry, and combines the latest technological developments to build more customer-friendly solutions across all areas of finance – investment, banking, insurance, lending. 

Nowadays, technology is probably the biggest disrupter when it comes to banking – especially now that the banking industry has undergone digital transformation. In this sector, technology has become a vital element of renewal. 

Working in this field means constantly learning. We work in a very fast-paced environment using the latest technologies, such as PSD2, AI, robotic process automation, marketing automation, UX, IoT and many more, which makes it a very exciting place to work. My tasks vary from process development to product development, from marketing automation to brand management, and from vendor contract negotiations to compliance tasks.

Working as a leader in this industry demands a hands-on attitude, as well as strong analytical skills to execute your business strategy.

Your last two companies – Ferratum and Zmarta – are true challengers, fully digital firms. What have been the main differences between working for those businesses and for large incumbent firms?

To keep it short, customer-centricity and speed. These companies are doing everything to make their customers happy, and are constantly changing their organisations to support different circumstances. No one knows what the market will look like a year from now, so you must constantly renew your organisation. While this requires a lot from your employees, it is nevertheless rewarding. Players in this industry are usually agile, and do not have complex organizational structures. In addition, since FinTech interfaces with computer and mobile, the front-end development is crucial. Roles such as UX designer, digital product managers, full stack developers, and data analytics are very important in these companies. 

Which are the hottest FinTechs in Finland?

There are plenty of them! During these past years, many Finnish FinTech companies have managed to grow their businesses significantly – did you know that Finland has the most digital startups per capita in the world? The steady business environment together with the thriving startup scene makes Finland an excellent place to develop new innovative solutions. We have been able to build a strong ecosystem for FinTech companies: receiving financing, finding the right expertise, and building close cooperation between banks and other FinTech companies. 

Finland might be the best-kept secret in ICT and digitalization. And when it comes to banking in Finland, we have a high rate of digital adoption and a well-developed infrastructure for online banking and online credit. However, the Finnish banking market is dominated by four major banks, which together hold 81% of the market share. There is great potential for new challengers with innovative solutions – and of course, opportunities for cooperating with incumbent banks. 

Here are some Finnish FinTech companies to keep an eye on:

• HOLVI
• Enfuce
• Paytrail

Why did you become a leader rather than a specialist? What motivated you to take leadership positions, and the associated challenges and responsibilities?

I have over eleven years of leadership experience now. Growing as a leader has been a painful but fruitful journey of development. I have always been motivated by a strong desire to encourage others to perform better, enable growth opportunities and make changes. When I succeed, I want others to succeed with me. And when people around me succeed, I will succeed too.

Leadership is generally a challenging task, especially with coronavirus, and in the current market situation. It is no longer enough to “just get stuff done” and achieve your KPIs and budget; as a leader I need to ensure the well-being of my employees, to respect them and involve them in all situations. 

During my career, I have seen a tremendous need for better leadership. This inspired me to do things differently, and motivated me to grow as one of the new generation of leaders. There are very few certainties about the future, but one of them is that the world will be very different from how it is right now. New technology, new regulations, new innovations, new products, new organisational models, new attitudes, tighter competition, and especially a new generation that requires a new kind of leadership, with new skills. In the year 2020, for the first time in human history, the global workforce comprises five different generations. Globalisation, cross-border organisations and remote work have made leadership especially challenging, as it is not always possible to be physically present. However, I feel that physical proximity between leaders and employees is not always necessary – but mental and emotional proximity are essential.

These complications make leadership more challenging, but also more interesting. How does one then become a successful new-generation leader? I have been thinking about this question a lot. 

First of all, I believe that the most difficult job for a leader is probably persuading others to follow. This is only possible if you motivate your employees by inspiring them and setting a great example. Make sure that every one of your employees is accountable for what they are doing; this is easily done with clear and realistic roles and targets. 

In addition, I believe that self-learning is key element for successful leaders. Self-learning is one of the most interesting part in leadership, because it keeps your mind fresh and challenges you to constantly think of new ways to lead people and business. In addition, as a leader I must keep up with trends in my industry, and thus I have to love learning and sharing new information.

For my own development journey, I have built my own leadership philosophy, which includes my values as a leader. I did this mainly for self-learning, but my written leadership philosophy lets my team members and others know what I expect, what I value and how I will act in any given situation. Our values are our most natural motivators, so it is natural to refer to our own values when creating a vision or making a decision. Confidence is another key element of a strong leadership mindset. It comes from knowing yourself, and understanding (and appreciating) your own strengths and weaknesses. Confidence also comes from observing and analysing how you make decisions, both good and bad. I believe that each leader faces unique circumstances, brings unique backgrounds to their leadership position, and leads unique teams of individuals. 

So, to answer to your question, “Why did you become a leader rather than a specialist?”

The future needs a new kind of leadership and I want to be part of influencing that change. 

What has been the biggest lesson or challenge for you in your career in such a tech-intensive business?

Working in FinTech demands a strong understanding of the banking sector; you can’t be a challenger if you don’t know what to challenge. From a technology perspective, FinTech is a rewarding industry if you want to reskill yourself and pick up on trending technologies. I did not have a technical background, and to be honest, I wasn’t a big fan of technology. So I really ended up escaping my comfort zone to take new responsibilities in a tech-intensive business – which was perhaps a combination of courage and ignorance.
 
I had to learn everything from scratch, starting from the very basics: the meaning of terms such as API, PSD2, NFC, PCI, SaaS and many more. Quite soon, I realised that it is not only technical skills which are needed in this industry; there is also a need for professionals who understand the technology, the ecosystem it operates in, and how to commercialise new technical innovations. And so, over time, I got excited about technology. Working in FinTech definitely requires a passion for technology. A tip for those who are considering working in FinTech: you don’t have to be a strong technical expert as long as you have the right attitude and you are eager to learn. 

I know you have written a book – please tell us about it!

This book was written in collaboration with some very talented people – several young leaders, and the Finnish author and journalist Helinä Hirvikorpi. It was published in 2014. 

The book is called “From Manager to Leader” (Esimiehestä Johtajaksi) and we worked on it during our year-long leadership training. In this training, we were honoured to have coaching and mentoring lectures from many top Finnish leaders including former prime minister Mr. Jyrki Katainen, technology entrepreneur Mr. Pekka A. Viljakainen, Brigadier General Janne Jaakkola of the Finnish Defence Forces, and Ms. Maija-Liisa Friman, who was named Finland’s Most Influential Businesswoman in 2012 – and their thoughts about leadership are included in the book. 

From Manager to Leader is a unique combination of fresh thinking, advice for day-to-day work, and the wisdom of experience. It is a collection of thoughts about leadership from leaders across many industries and ages – not just from a dusty leadership guru in a corner office, or from the all-experienced leaders talking to the younger ones. 

The Covid-19 pandemic has had a significant impact on the emerging economies of the Western Balkans, a region where governments have imposed strict lockdown measures to control the spread of the virus.

From discussions with business leaders in the region across various industries, I have learned that consumer lending FinTechs are among the most hard-hit companies, for two reasons. As the newest actors in the microfinance sector, FinTechs are still under consolidation in terms of capital means and financial position, and their potential market took a big hit with the sudden unemployment spike and consumer spending freeze. Severe government emergency measures have forced FinTech lenders to make hard decisions by suspending repayments, restructuring existing loans and providing liquidity to their customers to manage the crisis. In response to the current unprecedented market disruptions, FinTech lenders in the region are taking quick steps to adopt new digital initiatives; moving their businesses online, maintaining seamless operations, making temporary business adjustments and rethinking their distribution channels. In general, FinTechs are heading towards a Low Touch Economy, which will likely be our post-pandemic economy. I have compiled some observations for individual Western Balkan countries:

Albania

• Albania had an early and very strict lock-down, which completely paralyzed the commercial activity of FinTechs for several weeks.
• Larger and more offline FinTech players were forced to take drastic measures: massive layoffs of up to 30% of their staff, salary cuts of up to 50%, and closing more than 30% of branches. Smaller and more online companies, and those operating through third parties, have found it easier to adapt and continue business. Marketing and training expenses have also been cut.
• New business has been reduced by 80-90% compared to the same period in 2019, due to the lack of demand.
• The Albanian government has imposed a payment and restructuring moratorium. All customers, individuals and businesses that have been impacted by COVID-19 have the right to postpone loan repayments for a period of three months, with no penalty charged by lenders. The moratorium was initially miscommunicated as a mandatory restructuring for all borrowers; this error has caused repayments to drop by 60% or more compared to the previous quarter and distorted liquidity ratios, which has especially affected companies whose liquidity is highly dependent on their lending activity.
• This reduced liquidity has resulted in: a) inability to continue financing, even with revived demand, b) inability to make repayments to institutional lenders, MFI creditors, etc., c) inability to pay operational expenses, especially staff salaries and point-of-sale lease payments.
• In an effort to preserve cash for better times, consumer lending FinTechs have been careful with their lending activity, while FinTechs operating in the car lending segment have been focusing on debt collection. Similarly, there has also been a tendency to lower the average loan ticket, and tighten lending conditions.

Bosnia & Herzegovina

• FinTech consumer lenders have been heavily impacted by Covid-19. They have seen a significant decrease in demand, with many consumers losing their jobs and thus their eligibility to apply for loans.
• The demand for goods has changed. Customers now prioritise covering basic needs over buying luxury products such as laptops and smartphones, jeopardising retailer partnerships.
• Some FinTech players were technologically ready to work from home offices using laptops and installed apps. At the same time, more traditional microfinance companies have been investing in digitalisation while lobbying for a more digital-friendly legal environment.
• Sporadic business growth has continued through the opening of new branches.
• In order to relieve the social and economic burden, the government has proposed several measures including a moratorium of up to twelve months, a grace period of up to three months, and a loan extension of up to six months. However, the final decision is made in a one-on-one consultation between lender and borrower.
• Companies have reduced Opex significantly by cutting salaries and keeping a skeleton crew in the branches to carry out business activity, while taking advantage of government compensation measures.
• New credit risk policies suggest that lending will shift away from red-flag industries such as hospitality and tourism.

Northern Macedonia

• The macroeconomic outlook for Northern Macedonia is more optimistic, due to the government’s more relaxed lockdown measures and rapid reaction to assist unemployed people with their lack of income. As 50% of the Macedonian economy is closely linked to German investment in the automotive industry, it is good news that German companies are showing signs of revival and are bringing people back to work. The hospitality sector remains heavily impacted.
• The government decision to cut the APR cap from 50% to 28% for three months has hit many FinTechs.
• FinTechs that are financed by p2p platforms are experiencing a real crisis, and as a consequence the profit margins are at breakeven, or 0.5%. The banks are unwilling to lend to FinTechs under such extraordinary conditions.
• Plans for further expansion by opening new branches are now on hold, while cost-saving steps such as salary cuts were taken in April.
• Demand and collection have been heavily impacted, with the government extending instalment repayment periods by up to six months for banking clients and three months for microfinance.

Kosovo

• The Central Bank of Kosovo has announced that borrowers have the right to discuss restructuring terms. The CBK has also eased provisioning, classification and penalties for all banking and microfinance clients, except for public institutions.
• Demand for loans has decreased, while the criteria have become stricter, and there is less flexibility for lending.
• The financial sector in Kosovo has not seen any salary cuts, layoffs, or branch closures to date.

Bulgaria and other CEE Countries

• In general, FinTechs have accepted the measures taken by national regulatory bodies and are adopting their businesses to obey local legislations and respond to customers in the best, quickest way possible. This is challenging due to the constantly shifting situation. For example, in Poland legal changes happen on a weekly basis and it is difficult to keep up.
• Growth plans are on hold for the moment, and the priority is on stability, liquidity and compliance.
• Debt collection in Bulgaria is doing better than expected. Lenders are carefully negotiating and restructuring with clients. Unemployment has been the main cause.
• Marketing cost-cutting is widespread, as campaigns are no longer happening during Covid-19.
• In Bulgaria there was no moratorium on microfinance, just on banks. In other countries, the moratorium period varies from 1-2 months to the end of the year.
• In Bulgaria, lenders have lost their appetite for risk. Some companies continue to lend, while others have stopped their lending activity, despite huge operational costs. A few smaller players have even shut down business in Bulgaria.

Pranvera Papamihali is the Country Manager for Albania and a Regional Consultant for Pedersen & Partners. Ms. Papamihali has extensive international Executive Search experience, having led and executed assignments across the Western Balkans and Europe. Her area of expertise includes Financial Services (Banking & FinTech), Telecommunications, Energy, Retail, and Healthcare. Moreover, Ms. Papamihali has been instrumental in building Pedersen & Partners’ presence in Albania, ensuring increasing market share and brand recognition. Prior to joining the firm, she gained vast management experience as the Head of Corporate Affairs at Telekom Albania and Head of International Relations & Translation Department at ALSAT Television. Additionally, Ms. Papamihali brings many years of experience as a diplomat within the Ministry of Foreign Affairs in Albania. She has lived and worked for several years in Germany as an Albanian language instructor at the George C. Marshall Centre for Security Studies in Garmisch-Partenkirchen. Ms. Papamihali holds a Master of Arts degree in Hungarian Language and Literature from the University of Sciences Eötvös Loránd Tudomány Egyetem in Budapest, Hungary. In addition to her native Albanian, she speaks fluent English, Italian and Hungarian, and has good knowledge of German.

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