FinTech's Interpretations and Tunisian Ecosystem Analysis

Introduction

The continuous evolution of Information and Communication Technology (ICT) leads to digital transformation. Both, they are radically changing people’s habits as well as firms’ activities. They are changing the ways in which people produce, buy goods and services, and interact with each other. In the financial services industry, digital technologies disrupt the customers’ ways to access products. Moreover, they reshape the value proposition of existing financial services (Swacha-Lech, 2017). They are an accelerator for innovations and changes leading to rapid development of innovative and modern financial services. As a result, a new filed, namely Financial Technology (Fintech), is emerging.

According to Lee and Shin (2018), the emergence of Fintech comes with the development of electronic finance (e-finance) after the internet revolution in the early 1990s. “E-finance refers to all forms of financial services such as banking, insurance, and stock trading performed through electronic means, including the internet and World Wide Web”. Lee and Shin (2018) added that advances in e-finance and mobile technologies for financial firms have led to Fintech innovation development, particularly after the worldwide financial crisis in 2008. Fintech innovation combines the e-finance, internet technologies, social networking services, social media, artificial intelligence, and big data analytics.

Interest in Fintech is more and more growing across countries. In 2018, Fintech investments reached 111.8 billion euros worldwide, and the exponential dynamism would be reinforced in the future years (Tnani, 2019). Yazici (2019) highlighted the importance of Fintech by stating that it is reshaping the financial experience of millions of people and businesses on a global scale, and that it has the potential to dramatically change our understanding of financial services tomorrow. The importance of Fintech to economic development, attraction of foreign direct investment as well as the Know-How and the huge investments created by Fintech startups have led the same author to emphasize the importance of creating a dynamic, well-functioning Fintech ecosystem. Ecosystem defines the necessary infrastructure elements for the development of the Fintech area in a country.

However, despite this exponential evolution, at a theoretical level, there is still a lack of consensus on the definition of Fintech among scholars and practitioners (Milian et al., 2019; Iman, 2020; Liudmila et al., 2016). Indeed, in the literature Fintech is not clearly defined, and is still ambiguous for most of the people. One reason for this could be novelty of Fintech field and its rapid evolution (Liudmila et al., 2016; Iman, 2020). Better understanding of the term will help both practitioners to identify the potentials as well as Fintech threats, and researchers to reveal new possibilities for research regarding all its aspects (e.g., technologies behind, ecosystems, organizational matters, etc.) (Liudmila et al., 2016).

In Tunisia, some measures have recently been initiated by the Central Bank to promote the Fintech development. Yet, despite these measures, Fintech remains at an embryonic stage. Tnani (2019) advanced three major reasons to explain Tunisia’s lag in Fintech. The first reason is The IT directors’ lack of awareness about technological developments and innovative applications offered by Fintech startups. The second reason is the lack of an efficient ecosystem that meets both economic and regulatory challenges and the expectations of the various players in the Fintech sector. The third reason is the need for more synergy between Fintech and the banking and financial sector. To our knowledge, there is no research that has dealt with the Fintech ecosystem in Tunisia. As Fintechs are emerging on the Tunisian market, it is important, at this stage, to describe the Fintech ecosystem in Tunisia in order to give better visibility to researchers and practitioners in this field.

Thus, this descriptive chapter analyzes the Fintech concept and the Tunisian Fintech ecosystem. To achieve this aim, two sections are going to be developed. The first section will focus on Fintech emergence, definitions and the elements of ecosystem. The second section-will propose a description of the Tunisian Fintech ecosystem.