Introduction

INTRODUCTION

1. About FinTech Istanbul 4

2. Evaluation of the FinTech Ecosystem in Turkey 14

3. The Turkish FinTech Landscape 22

4. The Turkish FinTech Ecosystem 2016 Highlights 32

5. Rise of FinTech in Turkey in 2016 38

6. FinTech Istanbul’s Vision for 2017 42

Contact BKM to receive a copy of Banking and FinTech

Written by Melike Belli and Istanbul. Melike Belli is published by BKM, Banking working for a dynamic and FinTech - Developing a FinTech startup, FinTech Ecosystem in Istanbul Cybertonica, in London is the first and only book and was included in about FinTech in Turkey. The the Innovate Finance author’s analysis concerns Women in FinTech Turkish banking and the lessons 2016 Powerlist. She that can be learnt from cross- is also involved in border knowledge sharing projects to develop between one of the world’s the FinTech ecosystem centres of FinTech, London, in Turkey. and the emerging sector in

Banking and FinTech is also available free online: http://bkm.com.tr/wp-content/uploads/2016/02/Banking-and-FinTech.pdf BKM (Interbank Card Center) - CEO @SonerCanko

DR. SONER CANKO THE TURKISH FINTECH ECOSYSTEM

Turkey paves the way for transforming into a FinTech hub

016 was a year FinTech continued shining all Blockchain training. We organised meet-ups with 2over the world. The partnerships established the participation of the top FinTech influencers between the banks and FinTech companies such as Chris Skinner, Dave Birch and Oliver enabled the innovative and value-added business Bussmann. During these events, we aimed to models to be realised and FinTech solutions to determine the roadmap to be followed by Turkey, reach the wide masses. While the payments to take actions to build FinTech ecosystem on a continued being one of the most important solid foundation, and to enable the ecosystem elements of FinTech; the subheadings such as to be more closely acquainted with each other. lending, personal finance management, money For the similar purpose, we also took part in The transfer, InsurTech and Blockchain started Global FinTech Hubs Federation established with attracting more attention. Considering the the purpose to gather the important FinTech distribution of the investments, it is observed hubs around the world under a single roof. We that Northern America and Asia were the biggest consider these collaborations as the important markets and that Europe again fell behind in achievements to draw the roadmap from the very terms of the investments realised. beginning, and we aim to increase the number of value added partnerships in the upcoming In Turkey, 2016 was a productive year during period. which FinTech ecosystem matured. FinTech ecosystem managed to gain strength despite the Having a young population of 80 million, Turkey problems encountered in our country during has a strategic advantage to become the year. New actors from different areas got a FinTech hub thanks to its geographical involved in the ecosystem and also the interest location connecting Europe and Asia. When the of the investors in the ecosystem increased. This strong banking industry open to collaboration, is also proven by that half of the investments the dynamic entrepreneurship ecosystem raised by startup in Turkey in 2016 were made in and the qualified labour force are added to FinTech startups. The regulatory bodies these, the advantage we mentioned becomes conduct studies on fast conclusion of more valuable. We believe that thanks to such applications of new players and on the healthy advantages, Turkey will become one of the growth of FinTech ecosystem in the investment countries offering the most ideal environment area notably in the angel investment and the for FinTech startups by carrying its breakthrough crowdfunding. in recent years one step further. In line with this objective, we will continue working with great As BKM, we took on important responsibilities passion for Istanbul to become a global FinTech in 2016 for the development of the FinTech hub. I would like to express my gratitude to ecosystem in Turkey. In Istanbul that we aim to everyone for their support and contribution to transform into a global FinTech hub, we founded the development of the FinTech ecosystem in FinTech Istanbul in February as the umbrella Turkey and I hope that this study, providing organisation to lead the ecosystem. Besides two details on the progress of the FinTech ecosystem trainings provided the end-to-end fundamental in Turkey in 2016, will be useful for you. FinTech information, we also organised a 3 1 ABOUT FINTECH ISTANBUL

THE TURKISH FINTECH ECOSYSTEM

Selim Yazıcı - Soner Canko - İhsan Elgin

Foundation of FinTech Istanbul

he strong financial institutions and that are required for the sound growth of Tcompanies of Turkey have a great potential the nascent Turkish financial technologies for assuming a powerful role and positioning entrepreneurial ecosystem. Having embarked within the global FinTech ecosystem. on this journey with the leading names in the business specialising in research, training, It is possible for us to both produce competent education and entrepreneurship FinTech entrepreneur candidates from our institutions Istanbul is always open to cooperation with new and access to a significant pool of consultants individuals and agencies that are willing to assist that can support business ventures. FinTech the organisation in achieving this fundamental Istanbul was established in February last year goal. To this end, FinTech Istanbul has become as an organisation that brought together the a meeting point for the financial ecosystem by FinTech ecosystem players, which had been the bringing together the entrepreneurial candidates, only missing piece that we had in this respect. investors and professionals.

FinTech Istanbul platform is entrusted with the task of bringing together all the elements • • • a leadingroleinthefieldofFinTech, FinTech Istanbul: Having madeitsmissiontoensurethatourdomesticentrepreneursassume • David Birchatameet-uporganisedbyFinTech Istanbul content inthefieldofFinTech onitswebsite Shares themostup-to-dateandquality ecosystem, to sharetheirexperiencewiththelocal Invites globalFinTech leaderstoTurkey them, to initiateinformationexchangeamong same ecosystemthrough“FinTech Meetings” Brings togetherallthestakeholderson background andcorrectknowledge, right directionwithasoundeducational entrepreneurs areorientedtowardsthe 101 Trainings”, soastoensurethatthe Has launchedatrainingprogram,“FinTech

• • continue tobenurtured. community membersandsuchrelationships international collaborationswiththe FinTech hubsforthepurposeofestablishing partnerships withavarietyofglobal Has madedirectagreementsand such theyhavebecomeapointofreference, ecosystem relatedvideosinTurkey, andas recent andrichestFinTech news,articles, FinTech Istanbulcurrentlycontainthemost Has launchedabloginitswebsitethatof social mediaaccounts, ( www.FinTechistanbul.org) andthroughits 7

ABOUT FINTECH ISTANBUL THE TURKISH FINTECH ECOSYSTEM

The Bond Between BKM and FinTech Istanbul

n line with its aim to establish a cashless support the ecosystem around it with a view Isociety and with its 26 years of experience in of accelerating innovation, paving the way for the business, BKM can naturally be described new enterprises and rendering the competitive as the first FinTech institution of Turkey. As edge of finance industry in line with the newly having a non-profit structure and being capable developed digital transformation. of bringing together all the banks and financial institutions under the principle of “co-opetition”, In this respect, BKM is assigned the role of BKM is the driving force behind the development being the natural supporter of the foundation of of the FinTech ecosystem in Turkey. It serves to FinTech Istanbul.

Our Partnerships and Collaborations

s FinTech Istanbul, we aim to follow every our established global and local collaborations. Aglobal and local development within the With the collaborations we made with important frame of financial technologies; to combine these FinTech organisations such as BKM and Startups. developments with Turkey’s current experiences; Watch in Turkey, and Innovate Finance and and to assemble unique brains producing ideas Global FinTech Hubs Federation (GFHF) in and solutions as well as technology. international arena, we aim to create the opportunity for our stakeholders to be informed We act upon our vision to become the catalyst about developments, to attend events, and to and supporter of a financial technologies develop joint projects all around the world. ecosystem focusing on human first in the news In the next period, we will continue our work and articles we share, our interviews, meet- to increase the number of these valuable ups and trainings we attend and organise, our collaborations and to open new horizons for the national and international publications, and Turkey’s FinTech ecosystem. 9

ABOUT FINTECH ISTANBUL THE TURKISH FINTECH ECOSYSTEM

PROF. DR. SELİM YAZICI

FinTech Istanbul - Co-founder @SelimYazici

Review of 2016 and Future Goals

e launched FinTech Istanbul platform than 200 FinTech startups operating in Turkey, Won February 2, 2016 and shared the having attracted investment of more than $65 objective, mission and vision of the platform million so far. This figure accounts for nearly with our stakeholders in the FinTech ecosystem. 47% of the investment that has been made for The feedback and support we received that day startups in Turkey. We see that there are a good were very important for us, because we were number of startups lined up for generating introducing something new for our country various services through innovative solutions. and shouldering a considerable burden. That From the perspective of FinTech, however, it being said, however, the process prior to the is not possible to suggest that the figures in introduction of the platform had been quite question are that high. As FinTech Istanbul, we valuable for us. All year long, we gained quite a have made it our mission to bring together all bit of experience in the nature of an organisation the necessary parties to help grow the FinTech that can create value in the FinTech ecosystem in ecosystem in Turkey in a healthy manner, create Turkey. value for our stakeholders and become a regional hub. The concept of FinTech is fairly new in our country; a quick observation of the incorporation To summarise the things we have done in the dates of the companies operating in this field last year, we have started by identifying the reveals that they are mostly established at the needs of the FinTech entrepreneurs based on beginning of the 2000s. The use of the concept the requirements of the ecosystem. First, we under the name FinTech is even more recent. In have set up FinTech 101 courses to educate the the end, we can conclude that there are more prospective entrepreneurs on how to found a also sharethelatestdevelopments intheworld ecosystem atbothhomeand inabroad.We of referenceinevaluatingthe Turkish FinTech players. Today thismaphasbecomeapoint Ecosystem Map”consistingofFinTech ecosystem is aTurkish startup,andcreated a“FinTech in collaborationwithStartups.Watch, which publication ofexclusiveFinTech analysisreports support ofBKM.Moreover, wehavelaunchedthe and translatedthemintoTurkish throughthe latest booksofChrisSkinnerandDavidBirch Powerlist. Ontheotherhand,wehavehad on InnovateFinance’sWomen inFinTech 2016 Cybertonica inLondonandhasbeenincluded Belli whoisworkingfortheFinTech startup Banking andFinTech, writtenbyMelike first andonlybookaboutFinTech in Turkey, on FinTech. Inthis respect,wepublishedthe in ourcountryandaimedatcreatingcontent Thirdly, wehavenotedthelackofpublication field. future entrepreneursthatwilloperateinthis that ofourcountryandcreateavisionforthe them comparethepracticesinworldwith leading figuresinFinTech, asspeakersandmade and DavidBirch,whoareconsideredtobethe We haveinvitedChrisSkinner, OliverBussmann in thisfieldandinvitedthemtothemeet-ups. Secondly, wehaveidentifiedtheopinionleaders London. collaboration withtheCoinsiliumteamfrom conducted thisone-daytrainingsessionin training programonBlockchain.We have participants. We havealsosetupasignificant been completedsuccessfullybynearly100 training programsthatwehaverunsofar a proventrackrecordinthebusiness.Thetwo of highlyexperiencedexpertinstructorswith and regulations.We haveacquiredtheservices nature ofthefinancialservicesindustry, risks them withthetechnologicalinfrastructure, the growthpotentialaswellfamiliarising FinTech startup,buildabusinessmodel,explore the ecosystembyusing“co-opetition”principles. the ecosystemwithhelpofallplayersin solutions withfundingopportunitiesandenlarge is toseenewFinTech startupswithinnovative of internationalcollaborations.Ourexpectation supervisory bodiesandincreasingthenumber organising commonplatformswithregulatory- institutions, establishingcollaborationsand improving relationshipswiththefinancial briefing investorsonthesubjectofFinTech, The objectiveswehavesetforthisyearinclude activities andreachouttoalargeraudience. period. Itisimportantforustodiversifyour in linewiththesameobjectivesupcoming our region,wewillcontinuewithactivities From ourmissiontobeamajorFinTech hubin As canbeseen,wehavebeenquitebusyin2016. projects. participate ineventsandevendevelopjoint taking placeanywherearoundtheworldand chance tobeinformedofthedevelopments world. Thatway, ourentrepreneurshadthe bringing togetheralltheFinTech hubsinthe Global FinTech HubsFederation” thataimedat in thisrespectwastobeinvitedjointhe“The Finance andLevel39.Ourbiggestachievement with theleadingorganisationslikeInnovate respect, wehavefirstestablishedcollaborations enhancing andimprovingtheecosystem.Inthis as oneofthemostimportantissuesinterms international collaborations,whichisconsidered Lastly, wehavetakenstepstowardsdeveloping through thearticleswepublishonourblog. 11

ABOUT FINTECH ISTANBUL THE TURKISH FINTECH ECOSYSTEM

İHSAN ELGİN

FinTech Istanbul - Co-founder @IhsanElgin

“FinTech” will continue to be an important agenda item in 2017, too!

urkey is keeping abreast of developments will have a very important position in this field Tin FinTech in parallel to global markets. throughout 2017. While the number of FinTech investments was globally in 2010 was 223, this figure went up I believe that there are four main reasons for to 894 by the end of 2015. In 2016, value of that. Firstly, lawmakers in Turkey attach a great investment in FinTech amounted to $29 million importance to this issue (BRSA FinTech Round in Turkey. The same figure was $24.2 million Tables, BIST FinTech Technopark, BKM FinTech in total between 2012 and 2015. When looking Istanbul Ecosystem, etc.) and closely support into what is going on in Turkey, we see some FinTech ecosystem in all respects, acting jointly prominent developments taking place in similar with active players in every field. periods. While, in 2010, only 47 entities feed Turkish startup ecosystem, today, we have a Secondly, a very strong banking sector co-exists richer ecosystem consisting of more than 200 with a skilful workforce. Job cutting induced by different entities. When we take a closer look at technological developments and digitalising pave startups of 2016 in Turkey, we observe that half the way for birth of strong startups specialising of the total investments went to startups running in this subject matter, identifying significant their operations in the field of FinTech. We’re requirements in the field and suggesting currently watching some very strong market solutions. movements which indicate that our country 2017, aswell. We’ll keeponworkingatthesamepacein rounds ofFinTech 101 andoneBlockchain. 130 graduatesatthreetrainings,i.e.two hosted around200peopleandhad our firstyear, weorganisedthreemeet-ups, awareness andexchangeinformation.In through diverseorganisations,andtoraise networking andtrainingopportunities and newcomersoftheindustrybyproviding FinTech ecosystemtogether, tohelpspecialists of FinTech Istanbul istobringournational we establishedFinTech Istanbul.Themission With thesupportofBKM,inFebruary 2016 will betakentothatend. government, isanindicatorthatcriticalsteps which isalsoincorporatedinplansofour regional centreoffinancewithinnext10years, Fourthly, ourvisionofturningIstanbulintoa tomorrow’s world. new andstrongstepstowardhavingasayin Turkey atglobalFinTech eventsandtaking We, FinTech Istanbulplatform,arerepresenting we arecommittedtodevelopingnewbusinesses. leading marketssuchasLondon,Dubai,where a distanceoffourhoursbyflightfromglobal capital ofFinTech. Furthermore,wearewithin even seeourselvesamongcandidatesforthe in thenearbygeographyweareapartof, we Thirdly, wehavearobuststanceinthisregard from 2017: Below aresomeoftitlesshowingwhatweexpect • • • breakthrough ofAPIbanking. of suchinformationtoconsumersgiventhe solutions developedasaresultofanalysis We projectthatstartupswillbeofferingnew owing tothistechnology. encryption processeswillbematerialised lives. Mobilepayments,IDauthentication, technology inseveralareasofourdaily We willbeseeingimpactsofBlockchain from thissector. which arehighlycompetitivewillemerge (InsurTech), andsomestrongstartups sector, oneofimportantfieldsFinTech accelerating dynamismintheinsurance We believethat,thisyear, therewillbean

ABOUT FINTECH ISTANBUL 2 EVALUATION OF THE FINTECH ECOSYSTEM IN TURKEY

THE TURKISH FINTECH ECOSYSTEM

MELİKE BELLİ

Author - Banking and FinTech Cybertonica - Market Development Manager @MelikeBelli

Istanbul, the Emerging FinTech Hub in Europe

n 2014, while in London doing research completed a thorough update of my dissertation Ifor my Master’s dissertation and looking at and transformed it into a book, BKM published it how efficient the UK banking system was, I in February 2016 as the first and only book about noticed the new trend shaking up the industry: FinTech in Turkey in order to spread the word the rise of FinTech. I realised the huge and “FinTech”. positive impact FinTech had been making on the UK banking sector and decided to find 2016 was the year the Turkish FinTech out how Turkey’s financial centre, Istanbul, ecosystem started to grow and receive can learn from London to develop its own attention internationally. We saw very exciting, FinTech ecosystem. Meanwhile, even the term important and positive developments shaping FinTech did not exist in the Turkish financial the ecosystem: FinTech Istanbul was founded services and banking industry, the banks were with the support of BKM having the vision highly advanced in developing and investing to develop and promote the Turkish FinTech in innovative technologies. When I completed ecosystem; international partnerships were my research in late 2014, I knew the decision created to strengthen Istanbul’s position in the makers in Turkey could significantly benefit global FinTech scene; the FinTech investments from my findings. What Istanbul needed was an soared to $28 million; some pioneer banks ecosystem that would foster FinTech companies collaborated with and invested in FinTech to reshape the banking and financial services companies; training, hackathons, programs industry through continuous innovation. After I organised by large financial organisations to support FinTech entrepreneurs; large-scale • The Turkish FinTech industry needs to FinTech conferences and small meet-ups have more companies offering solutions where global FinTech influencers attended to meet the needs of tech-savvy customers were organised; courses were given to educate in multiple areas. Therefore, FinTech financial services professionals on FinTech; books entrepreneurs should not concentrate and new magazines dedicated to FinTech were heavily on building technologies in published. All of these developments brought payments but also look at opportunities banks, financial services organisations, FinTech in untapped areas such as lending and startups, regulators, policy makers, investors, InsurTech. EVALUATION OF THE FINTECH ECOSYSTEM IN TURKEY EVALUATION experts and professionals closer together and contributed to the creation of a healthier and • After the Brexit referendum, we have seen stronger ecosystem. some financial centres across the continent competing with London trying to become Despite these positive developments, there is still the next leading FinTech hub. In 2017, the some progress to be made in 2017: Turkish policy makers should decide how Istanbul will position itself in the changing • Like the players in successful international landscape of FinTech in Europe to grow in FinTech hubs have been working hand importance. in hand with their regulators and policy makers, the Turkish authorities should Looking at the exciting progress the Turkish continue their efforts in creating a FinTech industry has made in 2016, I believe supportive regulatory ecosystem meeting new developments will continue to shape the needs and expectations of FinTech the ecosystem in 2017. I recommend FinTech companies, banks and other stakeholders. enthusiasts around the world to put Istanbul on their “Cities to Watch List” this year. • Collaboration between banks and FinTech companies creates a win-win situation *If you are interested in learning more about as proven in the UK and globally. While the FinTech ecosystem in Istanbul, I suggest some banks are leading the way, we can you read my comprehensive book “Banking see there are some Turkish banks that still and FinTech – Developing a FinTech Ecosystem haven’t responded to the FinTech wave in in Istanbul” which is available free on FinTech a way they should. These banks should not Istanbul’s website. underestimate the power of collaborating with agile and innovative FinTechs and should consider doing business with them in 2017.

• We have seen a growth in FinTech investments (both the money raised and the number of companies funded) over the last few years. Hopefully, we will continue to see a rise in the number of FinTech companies operating and the FinTech investment which will help Istanbul to compete with the leading FinTech hubs. 17 THE TURKISH FINTECH ECOSYSTEM

OLIVER BUSSMANN

Top 10 Global FinTech Influencer @OBussmann

Next FinTech Hotspot? Look to the Bosporus

hen people think of vibrant FinTech championed innovations, like biometric Whubs, cities like London, Singapore or authentication at ATMs, that are still rare in most New York usually come to mind. Fewer would other jurisdictions. put Istanbul on their list of major centres for financial services innovation. Unjustly, in my Part of this success in financial innovation can be opinion. The truth is, Turkey has been a hotbed put down to the country’s natural advantages. of financial innovation for quite some time. With half of its 80 million inhabitants under the Thanks to support from the government and the age of 30 it is a nation of young people, many of Turkish financial services industry, I think it has whom are well educated. Turkey also leads many what it takes to soon be counted among world’s other Western nations in terms of internet and top FinTech locations. Here’s why I think so. smartphone penetration. This makes it a good environment for digital innovation in general Turkey has a history of embracing new and FinTech in particular. Under these conditions technologies, including mobile banking and it’s no surprise that Turkish bank clients have peer-to-peer payments, ahead of other nations. shown such a keen appetite for adopting new Turkish banks, to take one example, were technologies. pioneers in the development of digital wallets allowing clients to make direct payments Turkey’s innovation track record is also a result to vendors and each other. They have also of government policy. In 2009, the Turkish government launched the Istanbul Financial an important milestone on this journey. FinTech Centre Initiative with the goal of making Istanbul is keen to attract outside experts to the Istanbul a global financial centre by 2023. Since Bosporus to share their knowledge and so help then it has passed laws to bring Turkish financial the hub mature. I expect such collaborations will markets closer to their EU and US counterparts, be fruitful. To be successful, FinTech ecosystems merged its stock, gold and derivatives exchanges also require innovation management and to form Borsa Istanbul, the largest exchange orchestration. With farsighted policy and its in the region, and built a Canary Wharf-style natural advantages, there is no reason to think financial district on the Asian side of the that Turkey will not continue on its path to the EVALUATION OF THE FINTECH ECOSYSTEM IN TURKEY EVALUATION Bosporus. The government has also announced top leagues. I invite all those searching for the plans to create a Finance Technopark in Istanbul next great FinTech hotspot to learn more about in cooperation with the Turkish exchange and a Istanbul and Turkish FinTech. They may very leading university. well find what they are looking for here on the Digital Bosporus. The launch early this year of FinTech Istanbul is

Oliver Bussmann at a meet-up organised by FinTech Istanbul

19 THE TURKISH FINTECH ECOSYSTEM

FinTech from the Financial World’s Perspective

016 has already marked its place in In 2016, the convergence of giants such as 2the world’s history as the year where Apple, Samsung, and Alibaba, whose main field extraordinary events took place. FinTech concept of activities are non-finance, to consumers in rocked the finance world during all these certain areas (digital payments and financial political, social, technological and ideological intermediary services in particular) encouraged conflicts and reshaped the traditional banking as traditional structures to adopt a closer approach well as the future look of the financial world. to the entrepreneurship ecosystem. Financial institutions with hundreds of years of history The hottest discussion topic throughout the year have focused on transforming their own was how the traditional financial structures structures into values by adopting the innovative should approach the FinTech concept. Many ideas. Thus, we have witnessed the acqusition institutions and agencies first approached this or investment news of the finance giants in concept as the synonym of competition. Later, hackathons and other events held under different it was defined as collaboration and then a names throughout the whole year. Looking at the power forcing banks to offer more innovative investments in Turkey, we can feel the influence and customised services to their customers. of this trend. In Turkey, half of the year-round There is a similar picture in Turkey’s FinTech investments in startups were made into FinTech ecosystem as well. We see this when we look startups. at the messages conveyed by both banking and FinTech executives throughout the year. The On the other hand, rather than treating FinTech statements made throughout the year repeatedly as a new concept, some traditional financial emphasised the fact that collaboration supports institutions have defined it as a renamed the banks in terms of making new technologies version of an innovative developmental culture available quickly and the startups in terms of continuing within the existing structures. gaining financial expertise, visibility, support, However, the continuous acceleration of this and scaling. process and the fact that the regulations are not financial innovationineverywherefromthe of 24/7never-endingtechnologicalriseand FinTech hasbecomethesingle-worddefinition source andtotryproduceavaluefromit. before toreachtheknowledgeregardlessofits world. Today, itismoreimportantthanever centres theyopenedatdifferentpointsinthe research anddevelopmentactivitiesinthe regional financialinstitutionsincreasedtheir became anobligation,notavirtue.Many “globalisation” fromtheperspectiveofFinTech Towards theendof2016,word steps aretakenforangelinvesting. Turkey isoneofthecountrieswherepositive and presentittotheparliament.Inaddition, the worldtopreparelegislationoncrowdfunding Turkey managedtobecomethethirdcountryin towards innovativetechnologies.For example, also adoptedaproactivestrategyandtooksteps to supervisionandregulation,somecountries against allfinancialinstitutions. With regard the focuswerearticulatedascommoncriticisms the financialmarketswhereconsumersafetyis arranged andtransformedquicklyenoughin FinTech 101Trainings evident intheforthcomingperiod. organised trainingsandmeet-upswillbecome The effectsofincreasedawarenessthrough collaborations andcreatenewbusinessmodels. all playersintheecosystemandtoestablish important tasksinordertobringtogether ecosystem, haveundertakenmajorand Istanbul, whichwasestablishedforFinTech On theotherhand,centressuchasFinTech regard totheFinTech ecosystem. global researchandconsultingcompanieswith increase inthenumberofstudiesconductedby perspectives andcontents.Thereisasignificant and technologicallinestoproducedifferent journalists togobeyondtraditionaleconomic institutions butalsomanymediaoutletsand and developmenthavelednotonlythefinancial western coastsoftheUSA.Thistransformation Asia-Pacific horizonwherethesunrises,to 21

EVALUATION OF THE FINTECH ECOSYSTEM IN TURKEY 3 THE TURKISH FINTECH LANDSCAPE

. Next-generation personal . Robo-advisory ﬁnancial management . Social investing . Peer-to-peer lending . Crowdfunding . Blockchain and investment . Investment across . Application programming . New digital lending regions engine interface ecosystem . Aggregator comparison . Payment infrastructure engine . Big data base risk assessment . Anti-money laundering and know your customer . Mobile payments . Artiﬁcial intelligence and . International remittances machine learning . Mobile point-of-sale devices . Cybersecurity . Other payment processing

Beyond banking

Digital for unbanked

Retail value WEALTH RETAIL chain and MANAGEMENT coupons

Operations and Digital PAYMENTS infrastructure INSURANCE model reinventors

CAPITAL SMALL AND Virtual MARKETS MIDSIZE marketplace AND INVESTMENT ENTERPRISES BANKING

Next-generation digital marketing

. Telematics . One-stop shop for businesses . Social integration . Peer-to-peer corporate lending and investment . IoT and connected devices . Next-generation lending to small and midsize enterpises . Prevention . Digital cash management

. Next-generation trade ﬁnance . Trading . Next-generation collateral management . Trade analytics According to Panorama by McKinsey&Company, there are more than 30 areas emerging as new norms in banking globally.

Key FinTech Trends

. Next-generation personal . Robo-advisory THE TURKISH FINTECH LANDSCAPE ﬁnancial management . Social investing . Peer-to-peer lending . Crowdfunding . Blockchain and investment . Investment across . Application programming . New digital lending regions engine interface ecosystem . Aggregator comparison . Payment infrastructure engine . Big data base risk assessment . Anti-money laundering and know your customer . Mobile payments . Artiﬁcial intelligence and . International remittances machine learning . Mobile point-of-sale devices . Cybersecurity . Other payment processing

Beyond banking

Digital for unbanked

Retail value WEALTH RETAIL chain and MANAGEMENT coupons

Operations and Digital PAYMENTS infrastructure INSURANCE model reinventors

CAPITAL SMALL AND Virtual MARKETS MIDSIZE marketplace AND INVESTMENT ENTERPRISES BANKING

Next-generation digital marketing

. Next-generation trade ﬁnance . Trading . Next-generation collateral management . Trade analytics 25 Source: Panorama by McKinsey&Company (2016) THE TURKISH FINTECH ECOSYSTEM FinTech Companies in Turkey

PAYMENT

Payment Service Provider

iPara hepsipay paratika paynet Paytrek TurkPos iyzico mokapos Payguru

PayTR PayU Wirecard

In-Store Payment / Mobile POS Cash Register & POS

mokamobil ObiGarson öde.al PayU TurkPos YoroPay PayPad

Bill Payment

Faturamatik FÖY elekse Faturakom N Kolay Pratik İşlem Fatura Vizyon Birleşik TurkTahsilat Ödeme

Prepaid & Discount Cards(B2C) Prepaid Cards (B2B)

Akıllı Harçlık gustokart ininal manibux param Sinemia ininal param

Pre-Order & Pay Mobile Operator Payment

HesapAl JokerMenu Menulux Smart Order Tegmos GameSultan Payguru Wirecard

Direct via Bank Money Transfer (Payment)

BKM Express bpn CMT Gönder-al papara Skrill UPT ComPay

Order Screening (B2B)

Akınsoft omni PayPad Protel SambaPOS Vega Yazılım

Collection

Apsiyon BulutYönetim biyos Fonzip JointPOS netahsilat Payfull Raklet Uçarkuş

UzayPara Param BANKING

Digital Wallet

BKM Express CEPTETEB GPay BonusFlaş ininal fastPay BirCüzdan Wirecard Parakod THE TURKISH FINTECH LANDSCAPE

ParaMara Cüzdan Paycell

Card Schemes Unbanked

American Diners Club Discover Mastercard Visa Troy Multinet UP Express

Digital Banking Data

CEPTETEB enpara.com Nuvo Senin Bankan P1M1

Application Provider

monitise MEA Veripark tmobtech metamorfoz iPos Finartz Enqura T2 Software

Infrastructure

Banksoft innova Global Cardtek Tradesoft Fineksus Globit Cybersoft Payment

CROWDFUNDING

Reward Based Donation Based

Arıkovanı crowdFON fongogo fonlabeni Buluşum

INVESTMENT

Public Market Real Estate Investment

Matriks Trader Rasyonet birlikte.al 27 THE TURKISH FINTECH ECOSYSTEM INSURTECH

Comparison

Koalay Sigorta Sigortacı123 Sigorta Küpü Sigortam.net sigortayeri Dükkanım

Data Policy Management Risk Management

Reidin UrbanStat Polibis politaSİS Globit Risklator

FINANCING

Credit Compare/Consolidate

Artıpara Enuygun Hangikredi Hesapkurdu Tekkredi

Credit Scoring Supply-Chain Financing

Euler Helmes Findeks Kredico figopara UbiQ Innovations

PFM

Personal Finance Management

Artıpara Finansal GarantiOne GiderimVar Ajanda

CORPORATE FINANCE

Bookkeeping Payroll

BizimHesap Defter Paraşüt dakika KolayIK OnlineBordro Workcube

Accounting e-Invoice

ETA Logo Luca Mikro Yazılım Nebim FIT Solutions

THE TURKISH FINTECH ECOSYSTEM

2016 FinTech Investments in Turkey

The FinTech investment in Turkey has 47% of the amount invested in startups in soared to $29 million in 2016. The same Turkey was raised by FinTech startups in figure was $24.2 million in total between 2016. 2012 and 2015.

16 DEALS

29.0

6 DEALS 6 DEALS

4 DEALS 3 DEALS 10.5 .7 4.6 6 2.4 2012 2013 2014 2015 2016

Investment Value ($ Million) Number of Deals TURKEY ITECH IESTMETS

STRTU INVESTOR TYPE OF INVESTMENT TOTAL INVESTMENT ($) TE

DCP - Diffusion Capital Partners (VC), ABOUT FINTECH ISTANBUL PARAŞÜT 500 Istanbul (VC), Revo Capital (VC), Series B 30 November 2016 Ribbit Capital (VC)

UY UY ARI Teknokent Yatırım (BAN) Pre-seed 14 November 2016

MİKS ndisclosed Angel Investor Pre-seed 14 November 2016

M. Serdar Kuzuluoğlu, Y Melih Ödemiş, Nevzat Aydın, Başak Purut Seed 14 October 2016 ndisclosed Angel Investor 16 DEALS APSİYON Earlybird (VC) Series A 29 September 2016

Smyrna Capital (VC), KREDICO Eren ra Seed 24 August 2016 Kadir nd

DEĞERLEME PrimaryDoor (VC) Seed 12 August 2016 29.0 TAKİP - DTS

Esor PLUSONEMINUSONE Series A 02 August 2016 Investments (VC) 6 DEALS 6 DEALS

R İlker Diker Seed 27 July 2016 4 DEALS 3 DEALS 10.5 .7 İNİNAL Mastercard PTS - Turkey (VC) Seed 25 April 2016 4.6 6 Revo Capital (VC), 2.4 CRTEK Series A 30 March 2016 MV Holding (VC) 2012 2013 2014 2015 2016

M. Serdar Kuzuluoğlu, Y Melih Ödemiş, Seed 25 March 2016 ndisclosed Angel Investor

Investment Value ($ Million) Number of Deals COIN-TURK ndisclosed Angel Investor Seed 11 February 2016

FONZIP İhsan Elgin Pre-seed 01 February 2016 35

Estimated Value 4 THE TURKISH FINTECH ECOSYSTEM 2016 HIGHLIGHTS THE TURKISH FINTECH ECOSYSTEM 2016 HIGHLIGHTS THE TURKISH FINTECH ECOSYSTEM

FEBRUARY 2016

FinTech Istanbul, a meeting hub for the Turkish FinTech ecosystem connecting banks, startups, investors and professionals, was founded by BKM to develop, promote and represent Turkey’s flourishing FinTech industry.

Banking and FinTech – Developing a FinTech Ecosystem in Istanbul, the first and only book about FinTech in Turkey written by Melike Belli was published by BKM.

MARCH 2016

Turkey’s first FinTech training program FinTech 101 was launched by FinTech Istanbul with 40 participants to educate financial services and banking professionals, entrepreneurs, regulators, and investors.

4 Turkish FinTech startups raised $19.6 million in total during the first quarter of 2016.

APRIL 2016

Turkey’s national payment system, TROY, was launched by BKM to enable secure and fast payment transactions through an innovative payment method.

FinTech Istanbul became a member of Innovate Finance, an independent not-for- profit membership association representing the UK’s global FinTech community, in order to build relations and collaborate with the UK FinTech ecosystem.

FinTech Istanbul partnered with the largest technology accelerator of Europe, Level 39, which accepted to host Turkish FinTech startups and exchange the knowledge within Innovate Finance network.

Holland FinTech became a partner of FinTech Istanbul to collaborate in many different areas such as RegTech, InsurTech, Cybersecurity and to create investment opportunities for Turkish FinTech startups. MAY 2016

Innovate Finance’s Chairman Alastair Lukies, who defined Turkey as a continental FinTech bridge, visited Turkey to meet the leading FinTech organisations.

Value Web, one of the world’s most influential FinTech experts Chris Skinner’s new book on how FinTech firms are creating the Internet of Value, was published by BKM in Turkish.

JUNE 2016

Dr. Soner Canko, CEO of BKM, represented Turkey at FinTech Summit hosted by the White House in Washington, DC, which brought together stakeholders from the financial technology ecosystem to discuss how FinTech can advance financial well-being and economic prosperity.

$44.9 million was invested in FinTech companies in Turkey between 2012 and June 2016.

FinTech Istanbul formed a partnership with FinTech Headquarter, a German Network specialised in Blockchain, to create synergies and transfer knowledge between both parties.

JULY 2016

Startups.Watch statistics showed that the total FinTech investment in Turkey raised from $10.5 million in 2015 to $20.7 million in the first half of 2016.

35 THE TURKISH FINTECH ECOSYSTEM

AUGUST 2016

FinTech Istanbul became a member of Global FinTech Hubs Federation (GFHF), an independent and inclusive global network of emerging and established FinTech hubs.

3 FinTech startups completed their investment rounds and raised $2.2 million in total.

SEPTEMBER 2016

FinTech 101 second cohort started and 45 participants were trained about various FinTech topics including global FinTech trends and players, opportunities and challenges in FinTech, banking and payment technologies, FinTech investments and regulations.

OCTOBER 2016

FinTech Istanbul formed a partnership with Swiss Finance and Technology Association (Swiss FinTech) in order to create synergies between Turkish and Swiss FinTech ecosystems by bringing leading industry experts and successful startups close together.

NOVEMBER 2016

FinTech Istanbul and Coinsilium organised a comprehensive Blockchain 360 Training to provide attendees with an entry-level understanding of the blockchain landscape, the technology and relevant applications.

Startups.Watch launched FinTech Startups Worldwide, an open and free database of global FinTech startups which also provides news, lists and maps and receives content from its users. DECEMBER 2016

FinTech Istanbul attended FinTechForum’16 where financial services and banking professionals, entrepreneurs, government and regulatory authorities came together to talk about the future of Turkey’s FinTech ecosystem. The Turkish Deputy Prime Minister Mehmet Şimşek emphasised the importance of collaboration in the Turkish FinTech ecosystem during his speech

Turkey’s first national digital wallet BKM Express set a record by growing its number of transactions by 100% in 2016 and reaching 1.2 million users and 2.6 million transactions 4 years after its launch.

Identity is the New Money, a book about digital identity written by one of the leading global FinTech experts David Birch was published by BKM in Turkish.

JANUARY 2017

FinTech Istanbul attended the world’s largest event on consumer electronic Consumer Electronic Show – CES and Digital Money Forum in Las Vegas in order to share news and make analyses on the topics discussed during the event.

2 FinTech startups raised $14.5 million in total.

According to 2016 statistics published by BKM, the number of credit and debit cards in Turkey was 176 million while the amount of card payments was TL587 billion.

5 RISE OF FINTECH IN TURKEY IN 2016 THE TURKISH FINTECH ECOSYSTEM

There are more than 200 FinTech companies in Turkey.

The major area these companies operating in is payments.

The total FinTech investment in 2016 reached $29 million.

As of December 2016, Turkey was the Europe’s biggest card 14 companies market with 176 million credit received investment and debit cards. from angel investors and venture capitalists in 2016.

Share of online payments is 12% with the value of TL68 billion. 3 new FinTech books were published by BKM and FinTech Istanbul: · Banking and FinTech by Melike Belli (in English) The total amount of card · Value Web by Chris Skinner (in Turkish) · Identity is the New Money by David Birch (in Turkish) payments in Turkey was TL587 billion in 2016.

FinTech Istanbul became a member of and formed partnerships with 6 international organisations: · Innovate Finance · Holland FinTech · Global FinTech Hubs Federation · Swiss FinTech · Level 39 · FinTech Headquarter 4 meet-ups, to which the world’s most influential FinTech gurus such as Chris Skinner, Oliver Bussmann and David Birch attended, were organised by FinTech Istanbul. RISE OF FINTECH IN TURKEY 2016

More than 10 large-scale FinTech conferences, where dynamic discussions and significant networking opportunities took place, were held in Turkey.

85 participants from financial services organisations, banks, startups, investment companies, government agencies and regulatory bodies graduated from FinTech 101 course provided by FinTech Istanbul.

With 2 cohorts, 12 days and 36 hours of training were given during FinTech 101.

45 participants attended the 9-hour Blockchain 360 Training organised by FinTech Istanbul and Coinsilium.

3 new FinTech books were published by BKM and FinTech Istanbul: · Banking and FinTech by Melike Belli (in English) · Value Web by Chris Skinner (in Turkish) · Identity is the New Money by David Birch (in Turkish)

More than 600 articles including local and global news, written and video interviews with banks, startups and experts, blog posts, and translation of the influential FinTech leaders’ analyses such as Chris Skinner were issued on FinTech Istanbul’s website. 41 6 FINTECH ISTANBUL’S VISION FOR 2017

THE TURKISH FINTECH ECOSYSTEM

2017 will be a pivotal year for the rise of FinTech in Turkey

hile the history of trade and money in total, the total amount of investment exceeded Wdate back to the birth of humankind, $2 billion in 2011 for the first time. Only two the beginning of modern banking and financial years later, in 2013, this amount doubled up system can be traced back to the banking and reached $4 billion. The FinTech investments structure established by House of Medici in totalled more than $12 billion in 2014 and $22 Florence between 14th-17th centuries. We are billion in 2015. It is estimated that this amount living in a world where the gold, silver and has exceeded the value of the previous year. copper coins that used to be protected by thick The situation is no different in Turkey. We gates and strong armies, are now controlled by see that there are more than 200 FinTech the touchscreens. startups in Turkey and they raised a total of $65 million since 2012 until the end of 2016. Money is no longer a physical concept; rather it In 2016, FinTech startups accounted for 47% of is becoming an abstract concept through which the investments raised by startups. Also 2017 people reach a mutual understanding upon the have started with two important FinTech deals perception of value. Global communication amounted about $15 million. networks and information transfer rate are not goals anymore but real instruments. All these We are completely aware how crucial it is developments have a great effect on the financial to follow, understand and transform every markets and banking system and allow the rapid technological development into a unique change of established conventions. experience throughout this journey. With this awareness and from this point of view, FinTech To us, the term FinTech referring to financial Istanbul aims to follow every global and local technologies is something more than the development within the frame of financial technologies such as communication networks, technologies; to combine these developments mobile devices, Blockchain; it is a consumer- with Turkey’s current experiences; and to centred journey where consumer experiences assemble unique brains producing ideas and come into prominence. The importance of this solutions as well as technology. journey is also supported by the figures. While until 2010, global FinTech investments grew United Kingdom’s decision to leave European with small investments ranging from $1-2 billion Union with Brexit has encouraged cities ABOUT FINTECH ISTANBUL

49 THE TURKISH FINTECH ECOSYSTEM