The Bulgarian Fintech Association: The state should actively participate in the creation of an innovation hub to test startups in the earliest phase

The role of the state is not to prevent innovations from happening, but to be an innovator itself, which is already the latest approach to the success of an economy, according to the Bulgarian Fintech Association. The creation of an innovation hub will help start-up companies to test themselves at the earliest stage, on the one hand investors and state funds will have information on development and the potential of the ecosystem. When a business has been tested and given guarantees that it will have a market implementation, then it attracts more funding. Only 6 months in the regulatory sandbox or the so-called regulated infrastructure, where everything from regulatory to financial challenges to a specific business is tested, startups could count on 6 times more funding from European and national funds, thus avoiding the risks, emphasized Svetoslav Dimitrov, founder and member of the management board of the Bulgarian Fintech Association during the banking forum "Banking Today".

In the last five years, investments in fintech have grown by 155% and it is the most promising sector in our country. The most attractive segments for the development of the fintech sector in Bulgaria are related to the world of payments and open banking, announced Georgi Penev, executive director of the Bulgarian Fintech Association (BFA).

10 countries so far in Europe apply the method of test and learn approach. The result is that the winning ideas that make sense to invest in remain at the earliest stage of the market. This is also useful for entrepreneurs, because if they know that their idea is not working, they could not put time and effort into it, and can focus on developing a new idea or project, and this is very healthy for entrepreneurship as well, emphasized by the Bulgarian Fintech Association. The state must change its approach and switch to using useful and modern innovation models, for which it is enough to follow only the good and proven models in other European countries, the industry believes.

Such will be the role of the new Center for Digital Finance, but also of the started courses for state administration, pointed out Associate Professor Deyan Radev from the Faculty of Economics of SU "St. Kliment Ohridski". We support entrepreneurs and the state administration, for which we have prepared a course on blockchain innovations and their application in public administration. The course will cover the operation and creation of the regulatory sandbox.

In the last 5-6 years, there is investor potential, but there is no government attitude to switch to an active model, which will screen, accept or reject ideas that will contribute to the development of the ecosystem, commented Svetoslav Dimitrov. The active role here is the regulatory authorities such as the BNB, the Financial Supervision Commission.

Alexander Terziyski, partner in NV3 Venture Fund added that the Bulgarian IT business is developing in technology thanks to the serious development of talents and with this positive trend people from the region are oriented towards creating more and more companies.

According to him, the role of the state is to stimulate innovations that are easily adaptable to the mass consumer. It is necessary to create an opportunity for startups and entrepreneurs to test their ideas, that is why it is necessary to create such an infrastructure, Terziyski also pointed out.

A third of the students in his courses are from Bulgarian banks and are interested in master's programs related to the technological business, there are more and more experts from the state administration, said Prof. Radev. A change in regulators is needed and companies that are prepared for the real world will be able to think more about creating a business than meeting regulations, Terziyski also emphasized.

In recent years, venture capital has grown and is turning fintech into an attractive sector. The financial industry is characterized by the availability of personnel, which is a positive trend and means that Bulgarians from the region are oriented towards creating companies and it is extremely important to test them.

The role of these innovation hubs becomes very important when you create an environment for an entrepreneur in which he can test the idea and fail quickly, you create a process of multiplication, to create something new quickly and succeed quickly, commented Svetoslav Dimitrov.