Emerging Fintech in Estonia

• 24 November 2019 | 1054 Views | By Mint2Save

Estonia used to be a socialist soviet Republic known as smallest Baltic country with respect to population. The city grabbed the westernity after claiming Independence in 1991 and collaborating with EU NATO OECD. Located on the east coast of the Baltic sea,  Estonia has reached the pinnacle of technology, its implementation and upliftment of the masses.  There is a major significance of fintech in estonia.

Significance of Estonia in Evolving Fintech

Estonia is growing intensely by enhancing its free marketing ideology and seem to have very low debt in the shares of European economy. Estonia is, hence, the leading economic segment. The majority of people belonging to high income groups, encover those with low incomes.

Estonia aims at enhancing the technological aspect by standing as a world’s first digitized country. It has achieved its benchmark by prohibiting the cash transaction completely.

In 2005 estonia emerged with ‘I voting’ which enables the citizen to access the online voting rights. It also builds up a vocational education institution which guaranteed the leading career option to aspirants.

Skype

• Skype, a well known telecommunication software, is an Estonian invention which holds about 45% of estonian employees. Currently owned by Microsoft, Skype has established itself as the pioneer of audio and video calls over the internet. 

Nortal

• Nortal was coined in 2009. 
• Lead its name as the biggest software company in baltic.
• It aims on developing software ,specialize in technology.
• Nortal was termed by Priti Almae. 
• It successfully settled out its branches by employing 153 people in about 20 countries.

Current Estonia Module

In 2000 Estonia was seen evolving with free wifi zones. Nowadays the Estonians are deprived from religious concept. Only 20% of them follow their tradition by believing in God. Estonians stood at 22nd position, globally in human freedom index and 8th in economic freedom index. Estonia is a heterogeneous country in terms of language and culture. Owing to plethora of trade reforms, welcoming educated youth from all over,  the country has established itself as a culturally diverse nation. 

Silicon Valley of Europe

Tallinn is entitled by world heritage status and intended by UNESCO. Tallinn is also known as Silicon Valley of Europe. It imparts the opportunity to many entrepreneurs to start up their business. Most of estonia’s population is covered by Tallinn. The public transportation is almost free of charge in Tallinn. The science park in the city comprises the technology which specify the development. It holds the biggest tech park in baltic.

Geographical Influence of Estonia 

• Maximum part of Estonia is covered by presence of Russians.
• Estonia has many old churches with great historic importance.
• Estonia’s maximum production are wine obsessed.
• Estonians are fond of eating meat, fish and dairy products.

European country – Estonia is currently serving as the huge hub for startups from across the Globe. The reason being remotely accessible working opportunities that have been possible to such a great extent with technology and security. 

Estonia is leading in providing the virtual residency to the startups from across the globe. This has encouraged the startups to be established in European territory. 

Introduction to  Fintech

The word Fintech, as it sounds, is the combination of finance & technology. The financial tasks of any company that is performed with technology, is Fintech. Fintech companies make it easier by providing digital banking services flawlessly and seamlessly well. 

The financial facilities and its digital accessibility were first deployed in Estonia and appeared to be successfully serving the purpose.

The Fintech evolution and revolution in Estonia

Estonia termed as the world’s first digitally equipped nation. It is quietly fascinated with about 90% of Government services digitally. Even more than 340 companies all over the world have successfully grabbed their position in rendering the digitally equipped services.

Estonia a leading nation that is successful in establishing digital technology, e-education &  cybersecurity. In 2008 they have started rendering Medical services digitally by making hospitals digital. In 2005 Estonia emerged I Voting which exercised online voting rights among the citizens. It was the first country that accesses online voting rights.  

Estonia termed as technically advanced country grabbed place with the establishment of membership in Soviet union. 

Entrepreneur’s approach in Estonia

Estonia provides a platform for millions of entrepreneurs to start up their business. The companies gather here to develop their virtual reality strategy by enrolling in new advanced methodologies. 

Estonians here are backed with the digitized environment. Estonians are engaged with hand to hand connection with online transactions which results to vanish the traditional approach.

Estonian tendency proved that online equipped society is the easier and secured module of today’s era. 

The Financial Education Structure in Estonia

Estonia Ranks 3rd globally in rendering digitized education ensuring the technical, practical, secure environment. Vocational education institutions are being set up in Estonia which enables the students to visualize dreams/future. The financial literacy rate of Estonia is grasping a height. 

This awareness in Estonia in regards to financial education, financial technology, and financial security is highly leading in its segment. 

Cybersecurity in Fintech

All the services which are rendered online enable tremendous risk which leads to offering security over the internet which is termed cybersecurity. In 2008 blockchain was adopted which secures Database which is validated on the internet.

A company that develops solutions for financial services to people using software can be termed as Fintech. Financial services comprise money transfers, investing in companies, money lending, investing and many as such. The world has become digitized and most of the works are being done online these days.

People are used to this and it will be time taking for the people to go banks for tasks like money transfers or deposits. Fintech companies aim to bridge the gap and make online solutions with which users can do all money-related activities online through their smartphones or desktops.   

Fintech companies mostly are startups and are hugely supported in Estonia country. That is the main reason why approximately 99% of all transactions are happening digitally in Estonia. 

Money Transactions have been a boon of Fintech Services 

Along with this service we have Friendly Finance, Big Data Scoring, Investly, Bondora and much more which are doing great in their fields and are recognized all over the world.

Estonia is one of the few countries where blockchain technology was first used in the year 2008. Fintech’s are also aimed at digitizing the world by developing applications like smart contracts, electronic id for accessing which are used in daily use. Every task has to happen digitally and that is the goal of Fintech.

Fintech imparts Ease with Security

While the companies achieved a lot in providing ease of use solutions in financial services, the security also plays an important role. As all the details are being stored and accessed digitally, it is important to have the best security to secure the credentials, data being transferred and money in accounts. The companies use the blockchain to secure the transactions and it works quite well. One of the biggest blockchain companies, Guard time is a Fintech and Fortumo, Monese are successful Fintech companies developed in Estonia.

Fintech in Estonia is not only limited to payment sectors. They are working hard in the sectors of automation, IT, Artificial Intelligence, Cryptocurrencies, and Finance. The companies are being globally recognized for their contribution and success in their respective domains.     

Here are some of the globally known Fintech companies in Estonia:

1. Fortumo
2. Bondora
3. Transfer Fast 
4. Pay tailor 
5. Pocopay 
6. Friendly Finance 
7. Investly

Fintech has strengthened Startups in Estonia

Startups that wish to extend their boundaries to European countries, get all set with virtual office address and virtual residency certificate in Estonia. Moreover, Estonia Government is also offering the Estonian Startup Visa, a program that launched in 2017 to invite non-EU talents and be home to emerging entrepreneurs.

Startup Visa has proven to help Estonia’s growth significantly by managing the talent to work seamlessly across the boundaries. Stats show that, in a year 236% hike was seen relocating and collaborating in Estonia. In 2017, 167 employees and 107 founders relocated to Estonia. In 2018, the relocation number became – 483 employees and 174 founders. 

According to Allan Martinson, CEO of LeapIN, these seasoned entrepreneurs have strengthened the Fintech revolution and has made it a great success. However, this is just a beginning and has a long future ahead. 

Fintech itself being a bankable startup ideas has been serving various non-fintech startups significantly in their global growth.

Fintech introduced Digital Nomad

Digital Nomad visa is to be launched by Estonia Government to attract more tech-savvy entrepreneurs to Estonia. This will certainly bring a revolution to Estonia’s growth pattern.

The Digital Nomad visa would extend the young entrepreneurs who are residing in the country for a few days, to have a right to live for a year-long if they are willing to. Moreover, they are even allowed to visit the members of the other European countries with a Schengen visa. 

The temporary or virtual residentials are made to pay tax in Estonia. However, they must be a taxpayer in their country. Around 1400 people are allowed to get a digital nomad visa in a year. 

Take Away

With Fintech, Estonia has elevated the era of digitization and digital transaction. This digital transaction has helped both, the users and the government to track the data. Fintech has not only made the transacting process simpler and secure, but it has also maintained the currencies to be circulation. Definitely the future has much more to evolve in Fintech segments.