Page 21 - FintechAtlas2019

21
Croatia
A success story in which a fintech bridges a trust and information gap
The two pillars of Worig, the brothers Nino and
Deni Ćosić, created the first Croatian fintech startup
to address the pervasive issue of long-term rental apartments. In the following interview, Worig’s founders talk about the emerging Croatian fintech scene and
how they established their model for the cooperation between business and banks.
Please can you briefly describe your fintech core business and how your story began?
Ćosić: Worig provides tenants with a reliable and verifiable credit score that supports landlords in their decision-making process when renting an apartment. This score also enables tenants to access financial instruments for the purpose of covering their deposit or transferring downpayments to an escrow account.
We started as a real estate agency, trying to resolve the problem of young people, mostly students and newly qualified professionals, who are not considered eligible for renting an apartment. After some time, we realised that the problem was not the lack of a good real estate agency but a lack of trust and of reliable information about potential tenants. So we started working on Worig.
How would you describe the support of and knowledge about fintechs in the Croatian market? Ćosić: The best description of this would probably be partial. We always look towards Austria and Germany to see what is available to users in those markets in terms of advanced financial services. The legal landscape in Croatia is still a few steps behind the EU and many startups have issues even launching similar services on the Croatian market. Banks and insurance companies are also highly regulated and this discourages any entrepreneurship, cooperation and startup initiatives.
Nino and Deni Ćosić | Photo credit: Siniša Kanižaj, ABC Accelerator
How did Croatia’s Raiffeisenbank Austria d.d. support your work? And how do you see the collaboration between the fintech and banking sectors?
Ćosić: Participating in and winning Raiffeisenbank Austria’s Elevator Lab Challenge, a local competition organised by Raiffeisen Bank International’s fintech partnership program, provided us with much-needed visibility in the Croatian market. This came at a perfect moment and gave us the momentum to grow our media presence and interest amongst investors.
We believe that banks and fintech startups are perfect partners, rather than competitors, as we (as a startup) are often considered to be. Banks are institutions that people trust, that have been on the market for years and that are here to stay. The disruptive services developed by startups cover niche needs and services, which are complementary to those provided by banks. Cooperation between banks and startups can ensure that this synergy benefits all parties, especially our mutual clients. Open Banking is a good first step towards this synergy, but cooperative initiatives from banks will be the tipping point for many markets.
How do you see the future of fintech in Croatia?
Ćosić: The huge potential offered by Croatia’s developers, top universities and entrepreneurial spirit means that the country is already halfway to a great future, but it is still waiting for the legal and investment landscape to develop. Financial industry initiatives, such as Raiffeisenbank Austria’s excellent Elevator Lab Challenge, mean that some progress can be seen. However, it might take two to three years for fintechs to reach their full potential in Croatia.
Country data
Population 2019 (M)
GDP total 2019 (€ Bn)
GDP per capita 2019 (€, at PPP)
GDP growth 2019 (% yoy)
GDP growth 2020 (% yoy)
Official currency
4
53.9
17,700
2.9
-8.5
HRK
Total bank assets 2019 (€ Bn) 58 Total bank assets (% of GDP) 108 Account ownership 2020 (% of population) 88 Debit card ownership 2020 (% of population) 70 Internet usage 2018/2019 (% of population) 75 Usage of internet to pay bills 2020 (% of population) 58 Sent/received digital payments 2020 (% of population) 75 Source: national sources, ECB, ITU, World Bank, RBI/Raiffeisen RESEARCH; estimates for 2020 penetration ratios
Source: IMF, ITU, World Bank, RBI/Raiffeisen RESEARCH, data for 2019 and estimates for GDP growth 2020