Europe Offers Opportunities for Turkish FinTechs

Turkey has always been a bridge between continents, but while most of the country’s landmass is located on the Asian side of the continental divide, Turkish firms look more towards Europe for business opportunities, leveraging tariff-free trade deals inked with the European Union and the United Kingdom.

Germany, for example, is the country’s largest trade partner by export value, with the U.K. and Italy also making the top five, according to data from the Turkish Ministry of Trade.

But it’s not just Turkey looking to its European neighbors for opportunities, Hakan Gonca, founder and CEO of Turkish banking app Norma, told PYMNTS in an interview.

“Companies in Europe see Turkey as an opportunistic market to hire good engineers especially,” he said. “We have a good engineering education system [and] people in European markets are more aware of it than other places, [which is why] they’ve taken the steps to recruit from Turkey.”

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He added that with greater opportunities for remote work, many in Turkey have opted to work for international companies where they can earn a higher wage as European companies increasingly recognize the potential of the Turkish workforce.

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Gonca also noted the way that trends in Turkish banking have tended to align with developments in Europe, pointing to the regulatory similarities between Turkey and Europe.

“We had open banking regulation [come into effect] at the beginning of last year, and at the end of this year, banks are supposed to have opened all the APIs required through the central bank’s payment processing center to licensed companies,” he explained.

But moves to open up application programming interfaces (APIs) ahead of the mandatory requirement is a strong indication of market-driven innovation taking place in the banking ecosystem that is helping drive growth for FinTechs like Norma, Gonda noted.

“Even before [open banking regulation], there were a lot of companies, and a lot of banks, already opening up their APIs for some of the basic functionality [such as] accessing and viewing accounts in the last one or two years,” he said.

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Norma’s platform provides freelancers and small businesses with a business bank account, a point of sale solution and a financial toolbox to manage their business and finances.

According to Gonca, each different business processes “one kind of information,” but ultimately the goal is to address businesses’ pain points “from where the money starts and finishes to where you pay your taxes.”

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Leveraging open banking, the Turkish firm aims to deliver financial tools and services to its customers in a more seamless way, partnering with FinTechs like Finekra, a local startup that is integrated with banks and accounting programs and enables users to view and manage all their account activities and bank balances in one place.

Norma has also developed a marketplace where users can access services and tools to help them run their business, but he said the emphasis will always be on integration: “We help them purchase their benefits [and] insurance with partners who already offer those in the market.”

Moving forward, Gonca pinned his hopes on partnerships to help Norma grow its footprint across Europe, which presents huge opportunities for growth thanks to advanced legislation and passporting within the eurozone.

“You can easily get a Banking-as-a-Service partnership [in Europe] and open banking is much easier [there] than in other markets,” he said.

 

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