The EU Commission’s FinTech Action Plan was clear – Europe needs more globally competitive innovation hubs. This is a sore spot for the bloc, since the UK’s imminent departure may cut Europe off from London, the fintech capital of the world, with all its talent, technological infrastructure and finance.
Europe has its fair share of regional fintech hotspots – not least cities like Amsterdam, Paris, Lisbon and Tallinn – but it will still have a huge gap to fill post-Brexit. Even fintech investors in leading EU markets will need to find new technologies and business models to drive innovation in Europe’s financial sector. Crucial to this will be joint ventures with start-ups and banks outside the EU.
And that’s where Turkey comes in. As the bridge between Europe and Asia, Turkey has been at the forefront of a regional digital dividend, forming a supportive regulatory frame and drawing international investors to cities like Istanbul and Ankara to be part of the country’s fintech revolution.
The numbers really do speak for themselves. Turkey is the largest economy in the Middle East, and it’s 80 million people have a median age of just 31. Compare that to 43 in The Netherlands.
Turkey also has one of the highest smartphone penetration rates in the world, with 98 percent of internet users owning a smartphone. This has naturally spilled over into banking, where more than 65 percent of bank account holders preferring to use mobile banking apps. This makes Turkey a good testing ground for European fintech firms before they enter MENA or Asian markets.
According to the Global Fintech Index 2020, Istanbul has risen 22 places in the last year alone. This puts it in the same league as Hamburg and Copenhagen. As a natural centre of gravity for fintech talent, Istanbul’s Impact Hub – a co-working space that empowers creative impact-driven people – hosts part of the BBVA Open Talent, the world’s largest fintech competition.
The Foreign Economic Relations Board of Turkey (DEiK), in partnership with many of the country’s leading companies and financial institutions, hosts regular workshops to share insights on how to better integrate fintech into company operations. With a national fintech taskforce in place and a national digital currency set to launch in 2020, Turkey institutions demonstrate a strong commitment to a growing market that is still largely untapped by international fintech investors.
I admit it’s been impossible to ignore recent political tensions between Turkey and Europe, but our economic and social relations are deep and historic. As Chair of the Netherlands-Turkey Business Council for instance, I am always excited to point out that The Netherlands is the largest single investor into Turkey. Dutch investments into my country totalled $24.6 billion between 2002-2019. It is for this reason I am convinced that deepening our economic and commercial ties is the only way we can deliver collective prosperity.
If Europe wants to remain a global fintech powerhouse, it should be looking to Turkey for an impressive trajectory of growth and innovation. If, in the next decade, we want foster the kind of financial innovation that creates more high-quality jobs for young people across Europe and Turkey, it is vital we do everything we can to support the long-term economic health of our partnership, as allies with shared values.
The Fintech sector is where joint ventures can deliver huge growth, and would be a good place to start.