Survey by the Bulgarian Financial Supervision Commission reveals increased reliance on FinTech technologies in the insurance and investment sectors
Bulgarian companies involved in the insurance, investment and social industries are adopting FinTech solutions, such as digital platforms, cloud services, mobile technologies, mobile applications and customer-digital identification, more than ever before, according to a survey by the Bulgarian Financial Supervision Commission.
In September 2020, the Bulgarian Financial Supervision Commission published the results of its annual survey among supervised entities on the use of financial innovation. The Commission had a twofold focus: evaluate the implementation of FinTech solutions by companies active in the insurance, investment and social-security markets, and determine the effect of COVID-19 on its supervised entities and how financial innovation is being used to counteract the impact of the pandemic.
Results
Among the five FinTech areas that companies are turning to at this time, the Survey identified the use of digital platforms as the most popular, followed by cloud services, mobile technologies, mobile applications and customer digital identification.
The respondent companies active in the insurance sector have stated that the use of innovations has had a positive effect on decreasing expenses with 85% of the surveyed companies indicating a decrease of up to 10% in costs. In addition, half of the respondents reported an increase in the quality of the offered services as a result of the innovations. A new trend has been the incorporation of cryptography for information stored in cloud spaces. As for future plans, the majority of the companies have indicated that they will focus on mobile technology and digital platforms.
For insurance brokers, of strategic value is distributed ledged technology since insurance companies are stymied by the requirement that agreements be signed with wet ink, which severely limits the use of digitalisation.
For companies active in the investment market, a key element to acquiring new clients has been innovations in mobile technology and customer digital identification. As for cost-saving solutions, investment intermediates identified cloud services, digital identification of customers and smart contracts as contributing factors. Consequently, cloud services and customer digital identification have been cited as areas where companies will focus their efforts in the future, particularly over digital platforms. Surveyed companies also identified the need for the stabilisation and modernisation of the legal framework, especially regarding the application of GDPR and the Measures Against Money-Laundering Act implementing the Fourth AML Directive.
Social-security funds have identified two leading areas where FinTech solutions were implemented – web platforms and cryptography. In addition, these companies determined that digital identification, mobile applications and cloud services have helped them attract new clients. The surveyed companies state that the new technologies have not necessarily cut costs, but they expect FinTech innovations to decrease expenses in the future.
Background
The survey enjoyed 30% more participants this year over last with responses received by 103 supervised entities in total. This annual questionnaire is part of the Commissions Strategy for Oversight of Financial Technologies in the Non-Banking Sector. As in previous years, the most active respondents were companies in the insurance sector. The full results of this year's Survey can be accessed here.
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