An EFSE-funded feasibility study has been published, including the results of the Fintech Development Survey conducted by the National Bank

The financial services sector in the Republic of North Macedonia is ready for fintech transformation. The need for fintech development is justified by the numerous benefits and opportunities. Digital transformation is the focal point of all parties involved in the ecosystem, and the cooperation of banks and non-bank financial institutions with fintech-supporting service companies is in its infancy. At the same time, there is awareness of the risks attributed to the process of digital transformation. Thereby, further regulatory changes are needed to support fintech development.

These are some of the highlights of the online Fintech Development Survey conducted by the National Bank in October last year within the EFSE-funded fintech development project. The feasibility study containing detailed results of the Survey was published today on the National Bank website upon being reviewed at a virtual meeting of the National Bank experts.

The response to the Survey was solid, with answers from a total of 220 respondents such as banks (including the Macedonian Banking Association), non-banking institutions (insurance companies, brokerage companies and other non-banking institutions), alternative funding companies, accelerators, incubators and other partners that support small businesses, regulators and state institutions. Majority of respondents were representatives of traditional financial institutions (banks and non-banking institutions), and only a few other ecosystem participants which actually corresponds with the current financial system structure in the country and the initial results of the ecosystem mapping.

Regarding the opportunities and benefits from fintech development in our country, most of the respondents believe that the fintech sector can provide greater opportunities and better services, primarily for consumers, but also for small businesses. They also share the view that fintech sector tends to increase financial inclusion, and can contribute to aligning the financial system with international best practices. Only a few respondents believe that the fintech development will strengthen financial system and facilitate EU integration.

Concerning fintech-related risks and challenges, the Survey results point to security risks arising from the fintech development as main challenges, due to the possibility of cyber-attacks, financial crime and money laundering. It is in fact the most frequently mentioned risk globally when it comes to the risks and challenges associated with the fintech sector.

Regulatory framework that supports innovative solutions, while taking into account potential risks, is at the core of fintech development, digital transformation and financial system modernization. All groups of respondents point to the payment systems regulation as the major obstacle for fintech development. This obstacle would be overcome with the new Law on Payment Systems and Payment Services, which will be passed this year. It will allow new institutions to enter the market. The new payment services regulation will increase competition, improve services for citizens and companies and thus support fintech development.

Most of the respondents point to innovation in payments, big data analytics, and chatbots as technologies with potentially greatest impact in the next 3 to 5 years.

The feasibility study that contains information on the Survey results will serve as a basis for more detailed discussions with financial institutions, regulators and other stakeholders about the further fintech-supporting activities. One of the key activities will be the drafting of a national strategy for development of the fintech sector planned for this year.

For more information about the feasibility study and the Survey results please visit: Innovation Gateway > Documents