Financial Crime World

Fintech Business Models in Turkey: An Overview

Turkey has emerged as a hub for fintech innovation, with various business models that have gained popularity in recent years. In this article, we will delve into four key fintech business models in Turkey, including their related regulations and financial liabilities.

1. Digital Banking

What is Digital Banking?

Digital banking refers to the provision of banking services through digital channels, such as mobile apps or online platforms. This model allows customers to conduct various financial transactions remotely, without visiting a physical branch.

  • Banking Law No. 5411
  • Regulation on Information Systems and Electronic Banking Services of Banks
  • Regulation on Operating Principles of Digital Banks and Banking as a Service

Financial Liabilities:

  • Board member responsible for information systems (10+ years of experience)
  • Information Systems Assistant General Manager
  • Board of Directors (at least 5 members)
  • General Manager (10+ years of experience)
  • Assistant General Manager (7+ years of experience)
  • Internal Audit, Internal Control and Risk Management Unit

2. Banking as a Service (BaaS)

What is Banking as a Service (BaaS)?

Banking as a Service (BaaS) is a model where a third-party provider integrates into a bank’s system to offer banking services through open banking APIs. This model increases financial inclusion and facilitates access to banking services.

  • Banking Law No. 5411
  • Regulation on Information Systems and Electronic Banking Services of Banks
  • Regulation on Operating Principles of Digital Banks and Banking as a Service

Financial Liabilities:

  • None specified

3. Financing Institutions

What are Financing Institutions?

Financing institutions provide financing to real and legal entities to purchase goods and services. This model offers flexible and fast solutions to customers simultaneously with sales by leaving banks with their expertise only in goods and services financing.

  • Financial Leasing, Factoring, Financing and Saving Institutions Law No. 6361
  • Regulation on Principles for Establishment and Operations of Financial Leasing, Factoring and Financing Institutions

Financial Liabilities:

  • Board of Directors (Minimum 3 members)
  • General Manager (7+ years of experience)
  • Assistant General Manager (5+ years of experience)

4. Intermediary Institution (Securities)

What is an Intermediary Institution (Securities)?

This model refers to the provision of securities services by intermediary institutions, such as investment firms or brokers. These institutions facilitate transactions between buyers and sellers in the capital market.

  • Capital Market Law No. 6362
  • Communiqué on the Principles of Establishment and Activities of Investment Firms
  • Communiqué on Principles Regarding Capital and Capital Adequacy

Financial Liabilities:

  • None specified

Conclusion

This article has provided an overview of four key fintech business models in Turkey, including digital banking, Banking as a Service (BaaS), financing institutions, and intermediary institutions. Each model has its own set of related regulations and financial liabilities, which are subject to change based on the specific requirements of each model. As the fintech industry continues to evolve, it is essential for businesses to stay up-to-date with the latest regulations and best practices to ensure success in this rapidly changing landscape.