Until a few months ago, the financial markets conveyed solidity and a feeling of being reliable sources of profit. The rate of adoption of assets related to the crypto world did not stop growing and even the most traditional corporations began to launch products to compete in this market.
However, the invasion of Ukraine by Russia, coupled with high inflation and rising rates, has caused uncertainty has flooded the market. An uncertainty that has led to large falls in the stock market, reductions in the valuations of some scale ups Y startup, an increase in the difficulties to raise funds and crashes of the main cryptocurrencies. To seek answers to what is happening and what is going to happen in the coming months, the first Fast + Forward meeting was held at La Matriz with the participation of heads of institutions such as the Bank of Spain and companies such as Kibo Ventures, N26, Bitpanda, Capchase, Verse, Trade Republic and Mastercard and with the presence of startups such as Snab, Divilo, Aura Pay, Paymefy, Reveni, Deale or QCentroid.
Ángel Estrada, General Director of Financial Stability of the Bank of Spain, underlined the complexity of the current scenario despite the fact that in the short term the Spanish economy will be favored by the recovery of tourism, the use of savings accumulated by households during the pandemic and a efficiency of European funds, “downside risks have increased significantly. All this, he configures a very complex panorama that will have to be closely monitored in the coming quarters and be prepared to adopt targeted measures if necessary”.
This uncertainty in the global economy has also been transmitted to private markets, with particular force in the entrepreneurial ecosystem, where many companies need external financing for their survival. However, Juan López, a partner at Kibo Ventures, showed a more optimistic view, especially with those projects in more initial phases, “the funds early stage We invest in companies that have a maturity period of between 5 and 10 years ahead of them and, therefore, the macro cycle, although it is relevant in our decision, proves less important than other more long-term aspects. Kibo Ventures continues to invest, of course, applying caution and measuring the investor’s appetite in later stages that must take over the baton”.
The future will be digital or it will not be
This context of global uncertainty did not prevent all the speakers from agreeing on the role of innovation for the prosperous development of the economy. The head of the Bank of Spain emphasized the importance of this innovation overcoming certain challenges, pointing out that “the change in the financial cycle will also be a test to identify what truly adds value to the citizen”.
Some advances that will accompany all spectrums of the economy by offering faster, cheaper, more transparent and democratic services. “Until now, the bigger the companies were, the more financial instruments they had at their disposal to raise funds. This variety of options will also be available for small and medium-sized companies and more innovative alternatives will emerge”, explained Luis Basagoiti, co-founder of Capchase.
The banking and payment sector will also follow this path of innovation and transformation, offering services that are totally more adapted to the needs of citizens. “The banks of the future will offer an a la carte banking experience, 100% mobile, paperless, without small print and without branches,” predicted Pablo Reboiro, head of strategy at N26.
“Payments will be yes or yes more digital, more immediate and personalized. At least in the retail world, they will be managed from devices and where new technologies will play an important role in making them have less and less friction”, predicted Naike Sainz from Verse. Within these advances, Alejandro Banegas, Business Development director of Mastercard, highlighted three trends: purchases through voice, biometrics for consumer authentication and payments through chat or social networks.
Crypto and NFT, bubble or reality?
During the talk, one of the topics that could not be ignored is the role of cryptocurrencies and NFTs in this new economy. Especially after the doubts that prevail in public opinion after the latest falls.
Despite the pessimism of a large part of the population, Alejandro Zala, country manager of Bitpanda, reasoned why these declines are not entirely negative for the industry, “each correction serves to filter the industry. The future of cryptocurrencies will be led by those projects that have a disruptive technology, solve or improve a specific problem and have the necessary solvency or financial health. The recent bull run has served to broaden awareness of the product as well as attract regulators. This can only lead to more and better adoption by the general public.”
Another of the points on which the speakers agreed was on the advantages that this fever for investment has brought and the unfinished business that Spanish society has. “Today it is easier than ever to access the financial markets in a transparent and fair manner. The next big challenge is that of financial education, an area in which a lot of progress is being made, but which still has a long way to go”, summarized Kintxo Cortes, country manager of Trade Republic in Spain.
Despite the fact that a large part of the population is still unaware of the usefulness of this technology, new generations have already seen the value of digital assets and are taking advantage of these innovations. “Young people are getting used to living in a cashless environment and spend much of their leisure time playing video games. For them, buying clothes for their avatar, a sword for your warrior or a fantasy league card for a soccer star is as normal as it is for our parents to go to the kiosk to buy the newspaper”, concluded Juan López.
These changes are introducing important transformations that improve our relationship with money. However, it is essential that bridges continue to be built between companies and public institutions to ensure that these advances are stable and positive for society, without leaving anyone behind, as the head of the Bank of Spain pointed out, “regulation must be smart enough not to slow down this innovative processbut also to prevent it from generating instability in the system”.
*Fernando Cardona is responsible for Fast+Forward by H+K.