Insights into the Slovak fintech ecosystem

The Slovak fintech ecosystem is a special market, due to a variety of reasons. The financial industry is innovative, because multiple international banking groups are operating in a local market under separate banking entities, and Slovakia is the ideal market for testing for some of them.  

In terms of numbers of innovative fintechs, Slovakia is not lacking behind other markets in the CEE region. Local fintech ecosystem is shaped by brick and mortar banks, since traditional banks have been evolving innovations for longer period of time – thus for innovative startups it was harder to convince consumers to use their products or services. 

In order to support local Slovak Fintech ecosystem, several institutions have been established by private companies and by government bodies as well. Slovak Fintech association established first Fintech hub in cooperation with Mastercard and Vacuumlabs – with goal to provide innovative companies support in terms of technology, legal, and business consulting. VacuumLabs is local fintech company which focuses on creating tailormade solutions for variety of customers, including banks. Vacuum Labs has launched first LGBT+ bank in USA – Daylight. The CEO of VacuumLabs – Matej Ftáčnik describes Slovakia as a attractive market:

Slovakia is member of EU, NATO, Schengen area and is Euro country, which is a distinctive advantage amongst adjacent countries. We are close to Vienna, and Slovakia is close from West side as well as from East side of Europe. Most importantly, there is a big number of talented people, which is crucial to scale any type of business.

Another organization supporting the fintech ecosystem is Slovak Fintech & Insurtech Association (FINAS) with vision to be part of a key ecosystem of financial, primarily fintech, European centers and to launch a “Building innovation culture”. FINAS offers knowledge sharing, consulting regarding regulatory topics. 

Based on opinion of Peter Stražovec, CEO & co-founder of Slovak based fintech Payout is key advantage of Slovakia for any company pool of talented developers and business people, as well as ability to be extremely flexible if needed. Payout is certified payment institution with payment solution focused on quick and hassle-free transactions processing. 

According to Stack Overflow’s Annual Developer Survey, Slovakia is a genuine leader in the CEE region with 3.7 software developers per 100 members of the working population compared with a CEE average of around 1.3. 

The National Bank of Slovakia (NBS) has launched an Innovation Hub, as a platform on which fintechs (Slovak and international) can have direct conversations with the local regulator about different use cases. Some of the required licenses can be transposited across the EU, therefore it might be an attractive for fintechs/startups entering EU the opportunity to identify where regulation/licensing is required. Since the programme was launched in spring 2019 about 55 project teams have held discussions with the regulator. 

Regulatory sandbox of National Bank of Slovakia might be much appreciated by companies with following business areas: 

  • Alternative payment methods
  • Crowdfunding  
  • Robo-advice  
  • Cryptoassets and Initial Coin Offerings (ICOs)  
  • Insurtech  
  • Algorithmic trading 
  • Smart contracts 
  • Biometrics 
  • Artificial intelligence & Big Data 
  • Cloud computing