Welcome to the first edition of the series of articles that will delve into the anticipated fintech trends of 2024, both in Bulgaria and across Europe. To provide you with the most insightful perspectives, we’ve engaged with key experts from the public, private, and academic sectors. In a series of exclusive interviews, these experts will share their thoughts, predictions, and analyses on the evolving landscape of financial technology.
Today we are presenting you Associate Professor Deyan Radev. Since 2020 Prof. Radev teaches Fintech and Banking at FEBA, Sofia University and since 2022 he is a founding director of CEE Centre for Digital Finance. Prof. Radev has a notable background in the research and academic field as in 2014 his dissertation “Systemic Risk and Contagion in the European Union” from Goethe University Frankfurt, Germany, was distinguished with two German national awards and his work is now in operational use by the European Central Bank. In 2016 Dr. Radev joined Bonn University where he was a lecturer in Finance teaching Bachelor, Master and PhD level students.
Mr. Radev, which, in your opinion, are the global trends in 2024 we could expect in the Fintech industry?
“…banks will become even more open for cooperation with fintech companies – deposit-funded profits of Bulgarian banks are exhausting their potential and banks will turn to financial technology as a source of profitability and growth.”
I expect several trends to mark 2024 in fintech. First, in 2024 it will crystalize what the place of AI in the future of work will be, which processes can be automated and which will continue to rely on human expertise. Second, I expect that the dust will subside after the crypto winter since mid-2022 and we will finally see more viable mainstream business models based on blockchain and DeFi. Third, banks will become even more open for cooperation with fintech companies – deposit-funded profits of Bulgarian banks are exhausting their potential and banks will turn to financial technology as a source of profitability and growth. One such underexplored venue is open finance and I believe that Bulgarian banks will turn more actively to open banking, following the successful examples from the UK and the Baltic region. Open finance is related to another revolution in the international payments system: central bank digital currencies. Due to the significant push by central banks around the globe, state-issued digital currencies become widely spread. Banks in the euro area have accepted that new reality and are looking for viable business cases for the new digital euro. What I believe is not widely understood is that CBDCs are an evolution of open finance and that the frontrunners in the adoption of open banking will be most prepared to create business opportunities based on the digital euro.
What areas of fintech research do you believe will be particularly impactful in the coming years in the EU? How about in Bulgaria?
There are several areas of research that will gain prominence in the coming years: First, researchers will delve into what makes a fintech sector successful and a viable source of national and regional economic growth. Second, there will be more industry-led research projects. Third, I expect a trend towards research-based growth of the fintech sector that will put a sectoral structure into the so far mostly individual efforts of fintech companies. Last, there will be more theoretical and applied research on AI and blockchain applications in business and finance.
How can the academic sector foster innovation in fintech, and what are the key challenges it faces?
“As a main challenge I see the underutilization of research networks between academia and businesses.”
The academic sector plays a pivotal role in fostering innovation in fintech through various means. Firstly, by actively engaging in the quadruple helix of innovation, academia ensures collaboration among government, industry, and civil society, facilitating a conducive environment for fintech development. Secondly, technological transfer initiatives between academia and businesses, particularly in emerging fields like AI and blockchain, enable the integration of cutting-edge research into practical applications. Moreover, fostering research cooperation with businesses enhances knowledge exchange and accelerates the development of innovative fintech solutions. As a main challenge I see the underutilization of research networks between academia and businesses. This includes the limited provision of data for empirical research and data analysis, hindering the exploration of potential innovations. Overcoming these challenges requires concerted efforts to strengthen collaboration and resource sharing between academia and industry in the fintech ecosystem.
Is there a good collaboration between industry and academia and what do you expect from this partnership in 2024?
I can single out the partnership between BFA and the Faculty of Economics and Business Administration at Sofia University, which goes from strengths to strengths. The collaboration started with several courses in our master’s programmes where the members of the BFA also participated as guest lecturers. The feedback from students and business participants was overwhelmingly positive. This led to the Faculty receiving amazing support during the COVID-19 pandemic through scholarships and donations for improving our infrastructure for online and hybrid teaching. In return, aside from teaching, FEBA provides academic expertise in the various initiatives of BFA, ranging from financial literacy to policy and regulatory efforts, and promotion of Bulgarian fintech at home and abroad. In 20204, I expect more business leaders to enter the Faculty’s lecture rooms and more businesses to reach out to us with real business cases to solve.
