How Emerging EU Economies Are Taking Over Fintech Industries

  • 2023-09-06

Financial technology is the industry where traditional finance crosses paths with modern technology for automation and improves security, reach, and quality of service. The industry has grown in recent years thanks to the rapid growth of technologies that improve older systems and open new markets.

Europe has a long history of innovation, and the continent’s leadership is now helping the economic and technological advancements. The emerging economies in Europe are fast gaining ground as the leaders in global fintech services development and deployment. This article explores how Europe’s emerging economies are taking over the financial technology industry.

The Build: Factors That Enable Fintech Growth in Europe

Fintech transcends traditional banking systems into other areas of finance — such as investing, with modern investment and trading platforms such as TradingView — and on to financial education and automated processes that improve the decision-making of investors and consumers. 

Data from Mordor Intelligence, a market intelligence and advisory firm, shows that Europe’s fintech market has a transaction value of USD 3.600 billion, with a compound annual growth rate (CAGR) of 10%. This feat is not a coincidence, given that European countries dominate the 2022 Global Innovation Index. Here are some factors enabling the explosive growth across Europe:


Most European countries have established infrastructure such as stable electricity and internet services, transportation, security, and a highly skilled and educated workforce. These allow innovators to conceive and develop products and services and scale them to meet the market demand without some limiting issues.

Europe’s highly developed infrastructure schemes are helping emerging economies scale through certain phases in developing fintech solutions.

For example, European Energy is building a 115 MW PV project in Latvia to power an estimated 52,000 homes. Various 5G projects (with a target of 75% coverage by 2025) are also ongoing across Europe to provide everyone with fast, stable, and affordable internet services. This way, emerging economies can easily roll out solutions and reach their target customers.

Favorable Laws and Regulations

There are various opinions, ranging from support for stricter regulations to support for relaxed regulations. The European Union has managed to keep a balance between regulations that protect consumers and those that provide a conducive atmosphere for firms to deliver solutions.

While security and safety remain paramount objectives for the industry, European emerging economies are hardly frustrated by bottlenecks and regulations stifling growth. Consumers can easily fulfill KYC (know your customer) and AML (anti-money laundering) requirements and utilize fintech solutions within a few minutes.

Demand (Ready Market)

With over 841.5 million users across Europe as of 2023, the industry has a ready market that is expected to exceed 900 million users by 2027. Fintech product consumers range from professional to hobby investors, digital and traditional asset traders, established businesses, and individuals. Turkey and Romania, for example, have a population of over 83 million and 19 million people, respectively. The market potential is massive for fintech.

Europe’s emerging economies leverage this important factor to provide solutions such as advanced trading and investment platforms, personalized services, and products that target underserved populations that traditional banks may not fully reach.

Partnerships and Technological Advancements

Government-private and private-private partnerships are more common today as both government agencies and private firms contribute to the growth and development of the industry. For example, traditional banks and payment processors such as Visa and Mastercard previously partnered with a crypto company to facilitate crypto-fiat payments.

There’s also the advancement in technology. IoT, blockchain, SaaS, AI & ML are advanced technologies that make fintech solutions effective. Europe is a top destination for global talents in various fields, researchers advancing technological solutions and designing systems for the financial sector. The target population is also tech-savvy — an important factor in the increased adoption of technological solutions.

Investments and Funding in Fintech

Tech startups, firms, and companies attract billions in funding annually from venture capitalists and shareholders. This is critical to the success of companies in Europe. Lithuania, for example, attracted EUR 222 million in VC funding in 2022, a considerable milestone based on the expected outcomes. But startups in the UK and France, for example, raised USD 30 billion and EUR 13.5 billion in the same period.

Emerging economies such as Estonia, Poland, Ukraine, and Lithuania are making more inroads in attracting talent in tech and other STEM disciplines, setting up innovative hubs, and hosting conferences and meetings to advance tech knowledge in their countries.

Supply Meets Demand: Fintech Solutions for Consumers

The emerging markets and economies in Europe drive the industries by focusing on the gap between traditional financial institutions and consumers. Some of these are:

Embedded Finance

Embedded finance allows consumers to access financial products and services on non-financial businesses. For example, vehicle buyers may access auto loans directly from financial institutions through car dealerships or manufacturers, and consumers can access financial services through APIs and digital wallets on approved websites.

This greatly improves how products and services reach and serve consumers. For example, traders can buy and sell digital assets, currencies, and other trading instruments and access price data from one platform by integrating or linking APIs.

Decentralized Access to Global Markets

The promise of freedom from the encumbrance of traditional financial institutions partially fuels the growth of fintech companies associated with traditional economic systems. Today, the emerging economies in Europe are driving the reach to new and global markets. This is evident in the increase in the number of crypto owners and crypto literacy levels in Europe in the last few years.

The increased competition also forces traditional institutions to enter modern markets and bring products and services closer to their customers — a win-win situation for all involved. Consumers have more investment options, from ETFs to stocks and REITs. This makes portfolio diversification a more achievable goal for investors looking for instruments with various risk levels.


Although they typically have smaller economic strength than the top European countries, the emerging economies are building and developing the industry in Europe, gradually taking over as choice destinations for firms and investors looking for gaps to fill. The next few years hold more promise for the fintech industry in Europe and globally.