Turkey has a large and strong financial services industry. As reported by The FinTech Times, it also has a growing and potential fintech sector. The FinTech Times sits down with Ozan Eryavuz, Group CEO of the Alternative Finance / Fintech division of Global Kapital Group, who offers his insight on the Turkish market.
Ozan Eryavuz has been the CEO of Global Kapital Group‘s credit and payments arm since June 2015. Eryavuz has a strong track record of setting-up consumer finance, retail banking, risk and payment factories, and building automated lending and payment platforms in several financial services markets. Within Global Kapital Group, Eryavuz built gkCredit, which operates in eight countries with several consumer credit and payment local brands. gkCredit serviced over one million customers, primarily in the EU and Asian markets since operations started in 2015.
For our global audience, can you explain what the digital and fintech landscape across the globe currently looks like?
Fintech growth continues throughout the world, with both new verticals emerging, and players in established domains scaling to broader segments and territories. Digital banking and payment industries continue to lead the growth, insurtechs are emerging, while block-chain still tries to find its place for creating value in the ecosystem. Big-data and AI solution providers also continue to grow, supporting both the traditional and challenger financial service providers. Regulatory adoption is still a challenge across the globe, yet only a matter of when. Uncertainty caused mainly by COVID-19 has impacted fintechs just like any other FSI. However, sectors’ agility has so far helped many fintechs tailor their product and services to adopt the changing needs of customers.
How does this alter in Turkey?
Fintech growth in Turkey continues across many verticals. Among most established ones are:
- Money transfer and E-money,
- Payment processing (mainly for card transactions),
- Bill / money processing,
- Accounting and financial management,
- Crypto-currency transactions
However, key sectors leading the global fintech growth are still underdeveloped mainly due to regulatory restrictions. Among these are challenger neo-bank industry, consumer finance, P2P lending, crowdfunding and insurtech. Traditional banks in Turkey are also extremely powerful, and lead the fintech growth by acting as VCs or creating fintech solutions within their own range of product and services. In short, the fintech growth continues but will always be limited as long as strict regulations in the banking industry remain.
How have you developed your subject matter expertise and helped to share it across in your home country? And in Turkey?
As a management consultant, I have helped many banks in Turkey digitalise their processes in my earlier career. In fact, the banking industry in Turkey has already been ahead of the Europe with their innovative solutions around online-banking and card and payment solutions. This is one of the reasons for traditional banks to still act as pioneers in fintech innovation, because they have set the standards high. A key enabler in this has been the people factor in finance and technology industries. Human capital and resource quality in Turkey in these domains have been outstanding compared to many EU countries, which makes cities like Istanbul and Izmir a perfect hub to establish operations and technology centers for global fintech enterprises. It is often an unspoken industry, yet a mandatory prerequisite for every fintech to achieve success. Therefore, its the main reason for Global Kapital Group to setup its technology headquarters in Istanbul, where we can access to top industry professionals at affordable operational costs.
What are future trends and predictions you see happening in the region? (And specifically with your company?)
It is a matter of when, rather than if, for regulations to allow banks and credit institutions enter the market at lower thresholds. Global Kapital Group is an active player in consumer and business lending, and payments industries in markets where entry barrier is reasonable for the Group’s appetite. The growth of the payment industry is undeniable in Istanbul, Turkey as a whole and Middle East and North Africa (MENA) region, with new players increasing their volume and revenues each year. We are looking for opportunities in payments sector, either in form of an acquisition or a new regulatory license application to become a payment institution in these markets.
Any advice or recommendations you would give to other future fintech companies and entrepreneurs based in the Middle East & Africa (MEA) region?
Human capital is extremely valuable and a pre-requisite for fintech success. Gladly, the region has a surplus of top-notch technology and finance professionals, who are looking for opportunities to step into the fintech sector. New entrants should build their leadership team carefully, and allow autonomy for the company to grow with a fintech culture.