It was the first time that BaFin hosted a conference on the topic of fintech companies in order to exchange ideas and opinions with founders and company representatives.

Around 200 participants made their way to the Frankfurt House of Logistics & Mobility (HOLM) to attend BaFin-Tech, which was organised by BaFin's Central Event Management and sold out well in advance. In addition to fintech companies, many established financial services providers as well as representatives from academia and politics were eager to gain insight into the diversity of the market. Two panel discussions and four thematic workshops provided an excellent setting for productive discussions and dialogue.

Area of tension between regulation and digitalisation

Felix Hufeld, Dr Esther Wandel from the Federal Ministry of Finance and Prof. Dr Rainer Lenz of Bielefeld University of Applied Sciences, along with two representatives from the fintech industry, Frank Schwab (FinTech Forum Frankfurt) and Jochen Siegert (Traxpay), participated in the first panel, which dealt with the area of tension between regulation and digitalisation.

Bold claims by Prof. Dr Christian Rieck of Frankfurt University of Applied Science, who moderated the panel, won laughs from the audience and provided for controversial discussions. "BaFin is swimming about, trying to catch fish. But what if suddenly an enormous fish were to appear, threatening to swallow up BaFin?" Hufeld responded that BaFin was used to dealing with big companies and able to adjust accordingly. BaFin did not want to forestall the development of the market, he said: "Regulation and supervision always imply a certain adjustment to the market. But we must give companies the opportunity to develop and to grow." Hufeld emphasised his message about equal treatment in terms of supervision, i.e. "same business, same risk, same rules", while also making it clear that promising business models which fall below the threshold for supervision are also possible and welcome.

Disruption or inspiration

The second panel dealt with the topic of "Fintech companies – disruption or inspiration?" and was also met with considerable interest. Like the first panel, it included two representatives from the fintech industry, Prof. Dr Stefan Mittnik (Scalable Capital) and Dr Oliver Vins (Vaamo). Dr Joachim Schmalzl from the German Savings Banks Association (Deutscher Sparkassen- und Giroverband), Dr Stefan Rüping from the Fraunhofer Institute and Michael Mandel of Commerzbank also participated in the discussion. The panel was moderated by Holger Friedrich of Coretransform, a consulting firm for IT transformations in the financial sector.

The discussion was more technical than in the first round, but no less controversial. It quickly became clear that particularly Mandel, who recently became a member of the Commerzbank board of managing directors, does not intend to grant fintech companies a honeymoon period. Established institutions need not be shy to borrow good ideas, he said: "A well-executed imitation will produce good results, too" – a view which the founders of robo-advisors Vaamo and Scalable most probably did not share. Both sides agreed, however, on the importance of fintech companies as complementary to established banks. The assumption of panel moderator Friedrich that growth potential on the technical side by far outweighs growth potential on the organisational side met with the approval of all participants in the end.

Lively exchange: workshops, information stands and get-together

In the workshops, the focus of the dicussions was on current topics concerning blockchain technology and virtual currencies, robo-advice, crowdfunding and alternative payment services. The emphasis was on technical details and the supervisory treatment of these innovations.

In the time between the panels and workshops, many conference participants took the opportunity to clarify technical questions at BaFin's information stands. BaFin experts were available to discuss important issues such as authorisation requirements, prospectus requirements and video identification methods.

The concluding get-together was another opportunity for informal networking among the participants and with BaFin.

Continued dialogue

BaFin President Hufeld was pleased with the success of the conference, which also trended on Twitter that day. He said that BaFin would remain focused on topics such as blockchain technology and robo-advice which were discussed exhaustively in the individual workshops. With regard to the authorisation requirement for business models, Hufeld recalled that when authorising innovations, BaFin always needs to take into consideration aspects such as consumer protection and money laundering provisions.

Hufeld said that BaFin would continue its intensive dialogue with the industry which he called a "two-way street". "On the one hand, this is about further sharpening the supervisory focus when it comes to the issues affecting fintech companies, exchanging ideas and receiving new impulses for our work – not only with regard to fintech companies but also in terms of topics such as digitalisation and modern communication in general," Hufeld explained. "On the other hand, we want to give you the opportunity to gain an insight into our way of thinking and our methods so that you can understand what makes BaFin tick."