Russian Fin Tech faced the departure of the large funds and business angels
The main problem of the Russian financial company is the lack of a sufficient amount of investment to implement their own plans. In most promising companies, the main shareholder is its founder. Such a situation literally “lets the world through” the business beneficiary in case of failure. At the same time, there are three successful startups with ten bankrupts on the venture capital investment market – a great success.
Russian investors are trying to avoid compatriots, especially if their activity is connected with financial technologies. At the same time, companies that operate outside the country show good results. For example, the main FINTECH bank of Great Britain Revolut was created by the Russians.
Over 4 years, the outflow of venture capital investments from the Russian Federation increased 7 times. This is due to sanctions: large foreign organizations and venture funds left the country. They are not satisfied with the prospect of being suspected of ties with Russia. The community of business angels, which fueled promising companies at the planting stage, also decreased significantly.
Under current conditions, the main activity of financial and technological companies operating in Russia is projected that generate revenue outside of its borders.
Russian Fin Tech is not relevant for the domestic banks
The total amount of transactions in the industry of financial and technological startups in Russia in 2017 amounted to $ 30 million. At the same time, investments were made in the amount of only 7 million. At the same time, significant amounts of funds sent to large companies. Companies with ideas, but without a product, do not get anything.
Another problem is the low demand for fin tech services in the domestic market. Banks and exchanges prefer to make their own decisions or buy them abroad. For example, Alfa Bank uses fin tech infrastructure based on Corda R3, a platform associated with large American and European financial conglomerates.
In such conditions, start-ups do not compete with state-owned enterprises and private structures. Small and medium businesses are not interested in the use of complex financial and technological solutions.
As it turned out, fin tech is suitable for multinational companies with large cash flows. Those most in the United States. Due to the conservative banking system, many entrepreneurs use Fintech as a tool for money transfer within the system.
Of course, Russian banks could become the largest customers of a number of Fintech solutions. But, unfortunately, their existing tools, as well as cooperation with leading payment systems, cast doubt on the appropriateness of using the products offered by start-ups.
At the same time, banks themselves become IT-companies. To keep up with the times, they offer convenient mobile applications for remote financial transactions. Tinkoff Bank, for example, has focused on remote services and has no branches. All developments are conducted by in-house specialists. Therefore, this company also does not need technological solutions from outside.