Mastercard operates the world’s fastest payment system, connecting consumers, financial institutions, governments and businesses in more than 210 countries and territories around the world. Fintech Disruptors caught up with Mastercard’s Head of Digital Business Development and Fintech Engagement, for the Nordic and Baltic, Mats Taraldsson, to discuss future trends in fintech over the next year.
Fintech Disruptors: Thanks for speaking with us, Mats. As one of the world’s largest payment technology brands, what changes have you observed in the market and for your business over the past year?
Mats Taraldsson: Outside of our business, we’ve seen increased focus on regulation and financial management, as well as the continued proliferation of new solutions that are emerging alongside the traditional financial system. All of which means the market is experiencing growing competition.
At the same time, consumers are demanding ever-growing levels of both simplicity and security in digital payments. It’s important for the industry to strike the right balance between these two, keeping solutions simple and convenient without compromising on security. From a consumer perspective, there are a lot of options to choose from out there, so developing consumer trust are possibly more important than ever.
Fintech Disruptors: The theme of this year’s research is “success” – what do you see as key success factors for today’s fintech start-ups?
Mats Taraldsson: At Mastercard, we believe collaboration between different partners with different skills is key to success. We are looking to foster partnerships which we believe will be strong and attractive, creating products which we can scale beyond the Nordic and Baltic region. There are a number of companies in our region which have made a success out of partnerships with established financial institutions, including iZettle (working with banks on acceptance for micro-merchants), Fidesmo (connecting payments to wearable technologies), and Transferwise, a P2P money transfer service that supports multiple currencies.
Another success factor is going to be how fintechs respond to the opportunities offered by PSD2 and open banking. We think the regulatory changes implied by these developments will also present opportunities for traditional players to create new products – basically, there will be a more level playing field.
Fintech Disruptors: Speaking of regulation, what do you think governments can do to foster the fintech industry?
Mats Taraldsson: Different countries are supporting new innovations, typically by simplifying licensing procedures and creating regulatory sandboxes. One good example from the Baltics is the sandbox initiative led by the Lithuanian financial authorities. Creating a more open regulatory environment is the key here.
Fintech Disruptors: Finally, we have been asking all of our interviewees one identical question – what key trends do you see emerging in 2018 in terms of opportunities, threats and investor focus when it comes to fintech?
Mats Taraldsson: I think PSD2 is going to bring even greater proliferation of new products and services. I think we’ll also see AI, and specifically smart data mining, being used to create bespoke offers and services for consumers. We’ll also see increasing interest in biometrics as a form of security, since it’s simpler and more effective than the current over-reliance on passwords. In terms of investor interest, I think they will value a team that has strong drive and realistic business models even more than they have previously as competition heats up further. And speaking of realism, I think it’s worthy of note that a lot of fintech start-ups operate in single countries at a time when the world is becoming increasingly global – some fintechs need to do more to make sure their models will work outside their home countries and can be readily scaled up for application at a global level.