Cyprus urged to accelerate fintech reforms as banks retain their edge

Limassol, Cyprus. Established banks have prevailed in their initial contest with fintech businesses, participants at Tuesday’s Forbes Cyprus Next Gen Banking & Fintech Summit heard. Speakers said Cyprus must streamline regulatory processes, reduce bureaucracy and draw skilled workers to remain competitive in digital finance.

Banks respond to fintech competition

Costas Markides, a professor at London Business School, said fintech businesses had reshaped financial services but had not replaced traditional lenders. Banks had responded through technology spending, partnerships with fintech providers and acquisitions of competing businesses, he told the Limassol gathering.

According to Markides, fintech companies have expanded their presence over the past 20 years in payment services, currency exchange and digital investing, offering transactions with greater speed, lower costs and more convenience. Established banks nevertheless remain stronger in mortgage financing, lending to businesses and managing wealth.

He cited Revolut to illustrate the difficulties digital providers face. Many customers, especially younger people, rely on fintech accounts for routine purchases while continuing to receive salaries through conventional banks and approaching those institutions for mortgages.

President outlines financial innovation ambitions

Speaking at the summit on Tuesday, President Nikos Christodoulides presented Cyprus as an entry point into Europe’s market for overseas companies and investors, saying the country wanted to reinforce its role in financial innovation.

He identified a stable economy, membership of the European Union, a skilled labour force and an expanding technology industry as strengths supporting efforts to draw financial technology investment.

“Our ambition is to strengthen Cyprus’ position as a reliable, agile and internationally connected European gateway for financial innovation,” he said.

Christodoulides said the government sought to make Cyprus a location where fintech businesses could build substantial operations, create new solutions, secure capital, recruit talent and grow across markets in Europe and internationally.

Despite geopolitical uncertainty and economic difficulties confronting Europe and the surrounding region, he said Cyprus’ economic performance and strengthening public finances provided a basis for pursuing those goals.

Consumer association seeks price-platform review

Separately, a new survey by the Cyprus consumers association found differences of up to 226 per cent between prices charged for identical products in Cypriot supermarkets. The association has requested a review of e-kalathi, the government’s platform for comparing prices.