On Thursday 15th March, a new Business Networking session was held at EAE Business School. As always, the School welcomed a number of leading figures in the field to take part in the discussion panel. On this occasion, the event was organized in collaboration with the AECA (Spanish Association of Accounting and Business Administration) and the round table was moderated by Paco Isidro, a lecturer at EAE and financial consultant. The guests on the panel were Grégoire de Lestapis, the CEO of Lendix; Asier Uribechebarria, the General Director of Finanbest; and Horacio Molina, the General Vice-Secretary of AECA.
The objective of the discussion panel was to gain a first-hand insight into the instrumentation of the alternate finance sector and the role it can play in the economy, the balance sheets of Spanish companies and savings for investors. The fact is that, nowadays, consumers demand responsiveness and certainty from their advisors, which can be achieved thanks to an effective combination of finance and technology.
“Fintech has gained ground for two reasons: firstly, due to a gap in the market as a result of the recession and, secondly, due to the growth of the technology”. This is how the presenter, Paco Isidro, got the discussion panel under way. The lecturer emphasized that, five years ago, in his classes, students did not know what Fintech was and people spoke about it as a potential phenomenon. Now, it is an authentic reality. At a European level, Spanish ranks in sixth place in terms of ‘growth potential’, although Europe lags way behind the two big continents in this field: America and Asia.
It was then the turn of Asier Uribechebarria, the General Director of Finanbest, who explained that the financial system is particularly vulnerable to the incursion of the internet. This is due to “regulatory matters and the strength of the big internet players”. Amazon and Alibaba already control part of the online financial services market. The Chinese company is the world’s largest monetary fund, while Amazon has launched its own debit card in Mexico. According to Uribechebarria, “they are moving into financial services, not so much with aim of profitability, but rather to sustain their own ecosystem and retain their customers”.
“Fintech offers international financial services in an effective and less expensive way, more adapted to what customers are demanding”. In the opinion of the General Director of Finanbest, this is one of the best explanations for the growth of this phenomenon. One of the main spheres of Fintech is payment methods, which have been “working very well for years now”. Another area is international payments, which is already demonstrating its effectiveness by eliminating intermediaries and conflicts of interest, as well as “reducing costs”. “Crowdlending has also been proven to work effectively”. As an expert, if he had to invest in something right now, Uribechebarria would invest in Blockchain. Another of the key areas is crowdfunding on “websites that enable us to invest in startups”.
In view of the “lack of financial knowledge that exists in Spain”, robo-advisors act as online financial advisors for us. Uribechebarria explained that, in the United States, they emerged long before they did here. North Americans “save the most” and they eliminated costs, selected the best financial and asset advisors and posted it on the internet. “There is only one correct investment model” and robo-advisors will help to pick which one will give you the greatest profitability.
Next, it was the turn of Grégoire de Lestapis, the CEO of Lendix, who encouraged the participants to be confident about loans for companies. “We have to regain this confidence through transparency, monitoring regulators and the control that technology is giving us back”. In his opinion, technology is the driving force behind it all, as it “gives us all access to tools that are equally sophisticated as those used by the world’s leading institutions”.
At Lendix, Lestapis explained that they focus on medium- to long-term investments, as this feature makes them unique. They act as an intermediary between companies and investors, formalizing the relations between the two. “Sometimes, have immediate access to funds makes the difference between success and failure”, so they enable you to count on the finance you need within a week. At Lendix, they believe that businesspeople are smart and, after giving them access to this funding, they do not force them to buy any products because it is not in their best interest.
Before moving on to the next speaker, Lestapis explained that, at his company, as well as offering a tailored service, “the process is extremely streamlined”. In 30 seconds, they give you a response as to whether or not your financing is possible and, if it is, you can reach an agreement within 48 hours.
Horacio Molina, the General Vice-Secretary of the AECA, was the last speaker on this round table. In his opinion, Fintech represents a revolution in the world of finance, as it has forced traditional banks to ask themselves if it is better to “compete or collaborate with them”.
Molina emphasized that the most important figure for his Association is the accountant. At the AECA, the accountant plays a different role from the traditional one, because they gain added value from the information that the have access to. “Businesspeople want to know the reality of a project but, when it comes to translating it into numbers, they need somebody to do it”, and that is when the accountant comes into play. Not just anybody can take up this role of accountant because what the Association values most is the experience that they have accumulated. “An examination is no use at all because it represents the knowledge that was available at a certain point in time”.
For AECA, organizations that have a number of accounting experts can be accredited because they can exercise professional judgment. Based on the company’s level of turnover, it may have between two and seven accountants. To finish off, Molina added that accountants “will have to become less accountants and more experts, conveying greater certainty to investors”.