Steering Georgia's Fintech Evolution: David Kikvidze and FIA's Year of Strategic Innovation

In the wake of the 2008 financial crisis, fintech has not just recovered but thrived, escalating its influence within the global financial markets to a projected capitalization of over 550 billion USD in 2023—double what it was four years prior. This explosive growth underscores the sector's integral role in the future of financial systems worldwide. For Georgia, 2023 marked a year of significant strides, with the National Bank of Georgia implementing reforms that enhanced fintech’s role dramatically, attracting international players and spotlighting Georgia as a burgeoning fintech hub.

In that context, The Fintech Association of Georgia (FIA) is a catalyst, builder, and shaper of Georgia’s fintech ecosystem. Spearheading these efforts is David Kikvidze, the Chairman of FIA, whose extensive background in fintech paves the way for regional advancements in the industry.

"Georgia's fintech ecosystem has experienced significant transformation," David begins, reflecting on the year's achievements. "As we navigated through regulatory challenges and educational reforms, our focus was steadfast on enhancing the infrastructural and regulatory landscape to foster fintech innovation seamlessly."

Last year, the Fintech Association of Georgia (FIA) not only consolidated its position locally but also showcased the burgeoning potential of Georgian fintech on international platforms. Under the chairmanship of David Kikvidze, FIA has pivoted towards embracing and propagating innovations that promise to redefine the financial landscape of Georgia.

Navigating Challenges with Strategic Advocacy

One of the standout challenges facing the Georgian fintech sector remains its regulation. Fintech companies often find themselves in a complex web of compliance and legislative adjustments, which can hinder rapid growth and innovation. David, with his wealth of experience including roles in regulatory communication, has been instrumental in navigating these waters.

"The primary challenge facing us today is communication with the regulator and navigating the regulatory environment," David explains. "The National Bank of Georgia (NBG) primarily focuses on commercial banks, resulting in relatively less attention being given to fintech companies. Our association's objective is to advocate for the interests of fintech firms and actively engage with the National Bank to bolster the role of fintech companies in the financial sector."

Under his leadership, FIA has championed the cause of fintech companies, pushing for modernized regulations that cater specifically to the needs of this burgeoning sector. This proactive approach has not only facilitated smoother operations for existing companies but has also attracted new ventures to the Georgian market, keen to tap into a more accommodating business environment.

Empowering through Education

Education forms another cornerstone of FIA's strategy to bolster the fintech sector. Recognizing the gaps in current educational offerings, David Kikvidze has been pivotal in integrating fintech studies into the curricula of Georgian universities. "One of the most critical objectives of our association is education. We firmly believe that the advancement of innovative fintech products and services is unattainable without quality education," David states. "We were among the first to start discussing fintech within our consortium. We initiated a fintech training course, which we introduced at one university back in 2019. Today, we have implemented the fintech curriculum in five different universities, and I personally deliver lectures at these institutions."

The education and awareness initiatives FIA undertakes are various. There’s fintech initiatives for youth, like the 6-day camp in the Kakheti region, designed for financial literacy and education on fintech for children. Then there’s workshops and talks for industry professionals, such as the one on ecosystem research and digital financial services, held in collaboration with the IFC, the International Finance Corporation. There’s even hackathons, like the large-scale one in March 2023, where over 100 participants competed for a prize pool of $10,000.

A Year of Milestones

Reflecting on the year's milestones, David Kikvidze highlights several key initiatives and achievements under his chairmanship. From establishing crucial partnerships to hosting international forums like the UK-Georgia Fintech Forum, FIA has catalyzed the sector’s global integration. Events like the USAID Economic Security Program’s ‘Tap on Phone’ project not only enhanced SMEs' financial capabilities but also their market competencies, propelling Georgian fintech onto the international stage.

These efforts underscore FIA’s pivotal role in shaping a conducive ecosystem for fintech in Georgia—a mission that David Kikvidze champions with vigor. "By the end of 2023, the Fintech Association of Georgia already includes 26 companies. Our goal is to reach 50 companies by 2026, firmly believing that the fintech sector can attain a significant and robust position in the country's financial sector through joint and united efforts.”

Showcasing Georgian Fintech Globally

The global fintech landscape has been rapidly evolving, and Georgian fintech has not been left behind. Events like the UK Fintech Week have been crucial in putting Georgian innovations on the map. David Kikvidze's presentation at this event highlighted the strategic advancements Georgia has made in regulatory frameworks and infrastructure development, which have collectively enhanced the country’s appeal as a fintech hub.

Back on the home front, FIA's continuous dialogue with the National Bank of Georgia (NBG) has been fruitful. A significant milestone was the meeting with NBG management, where FIA presented its vision for the future of fintech regulations. These discussions are crucial as they help align the association’s objectives with national policies, ensuring that the regulatory environment supports both innovation and consumer protection.

The Future of Georgian Fintech

Given the strides made by the Fintech Association of Georgia (FIA) this past year, it's clear that the future of fintech in Georgia is brimming with potential. David Kikvidze views the association's recent achievements as foundational pillars that will support significant industry evolution in the coming years.

"In my profound belief, the financial sector of Georgia will undergo a significant revolution in the coming years," David predicts. His vision is robust and forward-thinking, emphasizing the shift from competition to collaboration between banks and fintech firms: “While there is still high competition between banks and fintech companies in Georgia, I foresee this competition transitioning into collaboration, with our association serving as the primary driving force behind this transformation.” This evolution reflects a global trend but is particularly poignant in Georgia, where the symbiosis between traditional banking institutions and nimble fintech companies is beginning to unfold.

David imagines a future where API technologies will become the bedrock of the banking sector, enabling services that are distributed through the innovative mechanisms of fintech companies. This is a strategic forecast, directing the focus of FIA’s efforts towards making this vision a reality: “Currently, the commercial banking sector in leading countries worldwide is reshaping its business model, shifting towards distributing services and products through modern technologies… I envision a similar future unfolding in Georgia, with our association playing a crucial role in facilitating these transitions.”

David also underscores the critical role of regulatory bodies: "The success of fintech in Georgia will largely hinge on the approach adopted by the National Bank of Georgia." His statement highlights the necessity for a regulatory framework that not only accommodates but also promotes the flourishing of fintech through progressive policies and supportive measures.

As we look to the future, the pathway for fintech in Georgia is clear. The sector is expected to grow significantly in the next few years—for example, the Digital Assets market is expected to grow by 10.5% by 2028. The association’s focus on projects like "Tap on Phone" with USAID and participation in international forums underscores their commitment to both local growth and global presence.

The growth in the financial sector is underway, and it seems FIA’s role is in steering this change, promising a potential future where Georgian fintech is both a national asset and a global competitor. The question for the rest of the world is clear: as countries like Georgia rise on the fintech stage, how will others respond? ❖

Image courtesy of David Kikvidze