Estonian FinTech Evolution: The Past, Present, and Future

Maria Nemilentseva, Bahar Bahramian Dehkordi and Keira Nicole Soutar

Chapter 10 in FinTech Research and Applications:Challenges and Opportunities, 2023, pp 385-417 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Estonia has become one of the best known digital societies through its advanced FinTech industry. It is one of the top-ranking nations for internet accessibility, with 91% of its population using the internet. Estonians’ lives are influenced by information technology through the range of various digital solutions available for both individuals and businesses. This chapter elaborates on the story of Estonia’s Fintech evolution from the post-Soviet era to modern times with governmental cooperation and considers possible future development that will allow Estonia to continue its FinTech evolution. It also describes the foundation of technological development for its existing financial services offerings, and it forecasts future trends. The research is built on conceptual theoretical findings, secondary data on FinTech development in the Baltic countries and empirical insights from interviews conducted in 2021 with three Estonian FinTech experts. From these interviews and exploration of the historical evolution of FinTech in the country, it is shown that Estonia’s success comes from the country’s past, as trust in the government was still a large part of the people’s culture at the time. Estonia has succeeded in its transformation due to the support of the government towards information technology. This can also be seen in the current evolutionary turn point whereby the push for the finalization of a regulatory framework for the FinTech ecosystem can allow further transparency. There are, however, limitations with any advancement towards the future.

Keywords: FinTech; FinTech Regulation; Artificial Intelligence; Machine Learning; Cryptocurrencies; Smart Contracts; Financial Fraud Detection; FinTech in Financial Services (search for similar items in EconPapers)
JEL-codes: G2 O3 O33 (search for similar items in EconPapers)
Date: 2023
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