Cryptocurrencies and blockchain have been the talk of the town for the past decade. Despite the steep highs and lows that cryptocurrencies have had, the fintech space has been quietly evolving as new innovations become an integral part of modern life. Some financial experts believe the financial technology era began in the 1950s, when the first credit cards were mailed to some 60,000 Fresno residents in California; others trace it to the 1970s, when ATMs began to take over the world. Opinions vary, with some experts tracing the origins of fintech back to the first wire transfers with payment orders in the late 19th century. Experts agree that fintech has been an increasingly important aspect of society since its inception.
One of the invisible parts of fintech is so-called embedded finance. Embedded finance stands for placing financial products within the non-financial customer experience. At first glance, this might not seem like a new thing, as businesses outside of banks such as retail chains, airlines, and supermarkets have been offering financial services under brand names (Costco, Amazon Prime Rewards, Walmart Rewards cards, etc.) for some time To illustrate the point further, retailers and auto dealers offer consumer loans that consumers can obtain directly at the point of sale.
Banks supporting these arrangements are thus ’embedding’ their services in the retail chain, reaching customers unobtrusively by providing a buying experience through a retail business with which the potential customer is already working. The next generation of embedded finance is the integration of financial products into the digital interfaces we use every day: customer loyalty apps, digital wallets, etc.
While developed market economies have long been a testing ground for a variety of new fintech tools, smaller European blocs such as the three Baltic states of Estonia, Latvia and Lithuania have lagged behind as they move into global banking and finance. A later sector (circa 1990s) after seceding from the USSR. Andrea Agostino, Italian-born entrepreneur, former international tax lawyer, international M&A specialist, moved to Estonia in 2007 and saw the country and its opportunities. Not long after, he co-founded Colonna, a real estate company that bought commercial properties on the cheap and rented them out. The company is now one of the largest commercial real estate operators in the Baltic region.
Estonia in the early 2010s was very different from 20 years ago. Its economically active population was—and still is—very entrepreneurial, making Tallinn, the Estonian capital, the Silicon Valley of Europe. Agostinone saw its opportunity in the banking industry and co-founded bank year 2013.
Inbank is a much-needed addition to the country’s banking system, as the new bank quickly begins processing 30% of Estonia’s nascent consumer credit market. This rapid ramp-up has been made possible by the forward thinking and technical acumen of the Agostinone and Inbank teams. Inbank’s embedded financial solutions are the driving force behind the bank’s growth and a customer favorite.
“People are tired of banks, and they’re absolutely right. With all the compliance, all the systems, hold your money, but once they own it, they make it look like it’s not yours anymore,” Agostinone explained.
Inbank is now active in all three Baltic States, Poland and the Czech Republic. The Inbank team plans to launch in Germany next year and win over Europe’s largest economy with its innovative financial solutions.As for Agostinone, who moved to Dubai to pursue his next project, you can keep up with his next business venture here.
Deepak Jain is a freelance writer.