Fintech trends for 2024 – interview with Boyko Atanasov, Chairman of the Financial Supervision Commission

Boyko Atanasov

Which, in your view, are the global trends in 2024 we could expect in the Fintech industry?

Boyko Atanasov: The Fintech industry is in a dynamic evolution state, whereat it incessantly reveals spectrum of innovations in front of us putting into question the established regulations. It is this industry, which namely provokes us to analyze the necessity of introducing progressive solutions accessible to a wider audience. I am deeply convinced that in the transforming financial ecosystem in 2024, services focused on personalized, secure and sustainable financial relationships, reflecting unprecedented technological advancement and consumer-centric innovation, will resonate.

In response to global trends in sustainability and environmental protection, this year we shall witness the rise of green (ESG) fintech trends, which will align financial technology with environmental considerations. Fintech solutions will evolve, so that by emphasizing both the sustainable investments and green financial activities, we will strive towards the goal of reducing the carbon footprint. The approach in question aims to connect technology with sustainability by strengthening the role of the financial sector in promoting practices that positively contribute to the environment and support global sustainability goals.

We are witnessing digitization in all of its aspects, including the use of blockchain and artificial intelligence (AI). In our role as regulator of the non-banking financial sector, it is very important for us to track innovative financing, evaluate new tools and practices, but at the same time protect consumers and act as a guarantor of the stability of the non-banking sector.

The advanced integration of artificial intelligence (AI) and machine learning (ML) will have significant impact on the customer experience, on the more precise detection and mitigation of fraudulent activities, and will optimize risk management strategies as well.

The development of these algorithms will lead to faster and more accurate financial solutions, invented to meet the unique needs and goals of individual users, so that we expect to enhance the level of their satisfaction and to increase their engagement.

The increased need for high cyber security will provide the basis for the protection of user data, tightly integrated in financial platforms. Improved features including advanced biometrics, multi-factor authentication and advanced encryption protocols will become ubiquitous elements of fintech security structure. These improvements will strengthen security barriers, protecting sensitive consumer information against potential threats and breaches, and maintaining integrity and trust in digital financial services.

How has the Financial Supervision Commission ensured adaptation of regulation to accommodate the evolving FinTech landscape in 2024?

Boyko Atanasov: It is important to note that regulatory approaches can vary in all jurisdictions. Specific adaptations will depend on regulations and priorities for each country or region, taking into account both technological progress and innovation as well as the European legislative framework.

FSC finalized the project for “Building a Unified Information System (UES). Since the autumn of 2023, the UES has been functioning successfully, and with its introduction, we report a significant improvement in the process of administrative service to citizens, businesses and supervised entities. All administrative services are fully accessible digitally. In addition to being part of the state administration system, in real time they are integrated with the activities and processes, and an exchange of information with the regulatory authorities of the EU – European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA).

Of particular importance for 2024 will also be the regulations of crypto assets, as the dynamic nature of financial markets accentuates digital financial services, which are an increasingly important part of the European economic environment. Although the FSC has not been unequivocally designated as the national competent authority in this area, our daily work with the European regulators, in the face of ESMA, gives us the reason to be directly involved in this process and to follow the legislative changes, still at an initial level, but with the expectation that they will completely change the financial landscape of Europe. We are monitoring the implementation of the two acts: the European Digital Resilience Act (DORA) and the Markets in Crypto Assets Regulation (MiCA). The DORA Regulation, which entered into force in January 2023, aims to create a regulatory framework for digital operational resilience through which all companies can ensure that they can withstand all types of disruptions and threats related to information and communication technologies (ICT), with the aim of preventing and mitigating cyber threats. On the other hand, MiCA’s goal is to create a regulatory framework for the crypto asset market that supports innovation and harnesses the potential of crypto assets in a way that preserves financial stability and protects investors. EU countries must adopt national laws aligned with the regulation by June 2024, with full implementation starting in stages. DORA and MiCA will support innovation and the deployment of new financial technologies while ensuring an appropriate level of protection for consumers and investors.

Are there specific regulatory challenges or opportunities that the Bulgarian FinTech business may face in the current and the following years?

Boyko Atanasov: It is important for the Bulgarian FinTech business to keep up with the evolving regulatory environment, to engage in constant dialogue with the relevant industry associations and to seek legal advice in order to navigate the specific challenges and opportunities in the country. Some common challenges and opportunities for FinTech businesses in Bulgaria are the regulatory framework, licensing and authorization, data protection and privacy, risk management and cyber security.

As for the opportunities, they are: digital transformation, financial inclusion, cooperation with traditional institutions, government support and initiatives, and cross-border expansion.

How does the Financial Supervision Commission promote cooperation between traditional financial institutions and FinTech startups, especially in the non-banking sector?

Boyko Atanasov: The Financial Supervision Commission always proactively participates in cooperation programs and initiatives, provides regulatory guidance and support. Showing regulatory flexibility and sharing information is paying off. I believe that our continued partnership with the Bulgarian FinTech Association will contribute to promoting the creation of innovation centers and incubators.

The role of the FSC is to provoke the achievement of synchrony between the regulatory requirements and their implementation in a digital environment, with the ultimate goal being to reduce the administrative burden.

Part of the concrete results is the functioning Innovative Hub, providing a single point of contact with FinTech companies and the changed regulations for accessibility to the capital markets of small and medium-sized enterprises, the successfully functioning UES and the mobile application – FSC Mobile, the purpose of which is to help users and supervised entities, through the use of the most popular operating systems – Android and iOS.

The Financial Supervision Commission will continue to actively work and be in dialogue with the  non-banking financial sector participants, as the result of the partnership between the national regulator and the business is the maintenance of a sustainable and innovation-friendly business environment.

Portfolio transfer from Codan Forsikring A/S to Alm. Brand Forsikring A/S

The Financial Supervision Commission has sent notification about its consent for the portfolio transfer from Codan Forsikring A/S to Alm. Brand Forsikring A/S

The Financial Supervision Commission (FSC) has been notified by the competent authority of the Kingdom of Denmark (Danish Financial Supervisory Authority) of the forthcoming portfolio transfer from the insurance undertaking Codan Forsikring A/S to Alm. Brand Forsikring A/S, including insurance contracts on which the Republic of Bulgaria is a Member State where the risk is located. After reviewing the portfolio documents, the FSC decided to send a letter to the national competent authority of the Kingdom of Denmark on granting consent for the transfer of the insurance portfolio from Codan Forsikring A/S to Alm. Brand Forsikring A/S.

Аn interview with the FSC chair Mr. Boyko Atanasov published in the “Banker” newspaper

The Financial Supervision Commission is a firm, unbiased and independent regulatory body

Mr. Boyko Atanasov has a master’s degree in “Planning and prognosis of the economic systems” awarded by the University of National and World Economy, as well as a rash of specializations in the economic sphere made both in Bulgaria and abroad. Owing to his over twenty years of experience gained in the National Revenue Agency, which is a specialized state body under the Ministry of Finance, Mr. Atanasov is one of the top experts in the taxation area. After having occupied various expert and management positions in the income tax administration he was nominated for and acted as managing director of the National Revenue Agency over a four-year period.

The professional career of Mr. Boyko Atanasov passed through the post of deputy minister in the Ministry of Finance responsible in charge of the department of state taxes and customs. In 2017 he has been designated Vice-Chair of the Financial Supervision Commission responsible for the “Investment Activity Supervision” Department, and in 2019 the Bulgarian National Assembly entrusted him with the position of Chair of the Financial Supervision Commission.

Mr. Atanasov, when we roll the film tape back, how and why did you make you decision to focus on the economy, in particular on the income tax administration?

In my view, the economy is one of the most promising professions, and at the same time, it is an occupation, which provides many opportunities for personal development. I feel confident in the economy because I am talented in mathematics, reasoning, detecting causalities and making analysis. All of them are at the basis of the economic processes. As regards the income tax administration, my decision was well-pondered. After graduating the University of National and World Economy, I seized the opportunity to candidate for a job position together with other candidates, taking into account that such a huge institution provided good prospects for development. From my point of view, it was a professional choice for a forthcoming quarter of the century.

Which are the most difficult and the most exciting challenges, which you have ever bumped into during your career?

At the beginning of my 20-year career as income tax administration officer, I first started from the lowest degree acting as tax inspector. Afterwards, I gradually passed through over eight positions of the hierarchy for a sixteen-year period, until I was appointed managing director for the period 2013–2017 having at command more than eight thousand officers, who were responsible for the taxes and social insurances administering in Bulgaria. I gained invaluable experience, which allowed me to recognize in detail all activities performed by the tax administration, such as serving citizens, collecting revenues and exercising control. The knowledge of these processes predetermined my perception of the things functioning or not, thus which of them had to be improved. I was convinced that there was a necessity of change, so it pertained to my career path and responsibility.

Actually, my greatest challenge consisted in the resistance on the part of the system to the integration of the new ideas, which meant that the officers had to leave their comfort zone. Day after day, month after month, I pursued my goal to persuade, to provoke, to find the right people who act as process engine, so that we make the change together.

There were three main challenges, which my team and I met, but I think that we successfully overcame them. The first of them concerned the digitalization process. In 2016, the National Revenue Agency became a body offering the highest percentage of electronic services in Bulgaria.

The second one of them concerned control functions, insofar at that time we built the information control system up, through which revisions are random distributed and assigned to the respective officers. We minimized in this manner the opportunities for corrupt practices and boost the confidence in the authority.

In the third place, we improved the main activity of the income tax administration, which is focused on collecting taxes and social insurances. We enhanced the collectability through provoking consciousness of the National Revenue Agency clients suggesting them that it pertains to their responsibility, so in 2016 we achieved over 85% voluntary payments of declared liabilities. It was for me an actual change in the way of thinking of our society, to which we came up after several years of collection and sustainability of best practices.

THE CONFIDENCE AND PERSONAL OBLIGATION TO CONTRIBUTE TO THE SOCIETY ARE OF MAIN IMPORTANCE

How did you succeed to convert the National Revenue Agency into a functioning body, which effectively collects its revenues and offers up-to-date electronic services to consumers and business?

A new manager usually pays attention to transformation. I always focused upon the sustainability of processes, which had become already effective. I was acquainted with them because I knew the way each of them had been functioning in the structure of the National Revenue Agency.  

The second aspect of my conception scheduled an analysis and integration of the worldwide best practices. In a four-year period, we invited strategic directors and officers of the most effective revenue administrations worldwide, such as the English, the Dutch and the Swiss one, to take part in several practical workshops. We were taught by them how plans should be effectively carried out, so that it aided the National Revenue Agency in rebuilding a more effective organization.

The third aspect of my conception concerned the leadership skills among the managers in the National Revenue Agency. Over a several year period, our leading managers had been attending individual coaching meetings, after which they became single staff instructors. I believe that this circumstance predominantly contributed to the change of handling and the behavior toward citizens. The Agency activities became visible through the quotidian and clear communication with people, so that we succeeded in reducing the administrative burden for the business. In my opinion, the slogan of the National Revenue Agency “Responsible today, safe tomorrow” symbolizes until nowadays the positive outcomes, teamwork and transparency in the Agency activity. In my view, the most significant event was the joint survey conducted in 2016 by both the Bulgarian Industrial Association and Gallup International Center for Public and Political Studies, which highlighted the National Revenue Agency as the leading Bulgarian authority enjoying the highest degree of citizens’ trust, namely over 50%.

Which leadership skills are necessary to become a top-level manager and to lead great teams?

In my opinion, each leader should be able to take on responsibility, to create a personal vision on development, in order to evaluate and integrate best practices after having analyzed and examined their impact on every single element of the system. However, mostly he/she should be able to communicate with his/her staff, with citizens, with clients and with each service consumer who raises a question or makes a good proposal. My main values consist of confidence and personal engagement to contribute to the development of the society. If you provide your confidence, you will enjoy the trust of the others. Thus, teach your officers so well, that they always have the option to leave and go on, but let your behavior toward them be so good, that they never make use of this option. Being executive manager or commission’s chair means to have a vocation for serving, contributing to a cause and developing it further.

“To stimulate creativity means to provoke the cogitation of your team because it is source of business ideas.”

Boyko Atanasov Бойко Атансов

What did you succeed to change and to improve in the activity of the FSC?

In reference to the digitalization, we developed and stand at the beginning of the exploitation process of the Unified Information System. It serves both the Commission and the supervised persons. The whole communication process will be carried out via electronic means, inclusively that with other bodies. It concerned an obligation of mine whose performance marked one more step, which we made to an improved operative communication between the authorities and the supervised persons. In consequence of this, the FSC is going to provide prompt and quality services when performing its regulatory activity and will secure transparency, as well. In this regard, we introduced a mobile application and a new website, which we shall further develop.

We established the FSC as a firm, unbiased and independent regulatory body whose positions in the society are well-founded, especially as regards the activity areas of its three divisions, each of them responsible for respective area in the non-banking financial sector. We also improved our external communication, so that currently we provide accurate information in due time, since we have to be an accessible authority, which is capable of conducting dialogue in order to be adequate and business-oriented. We brought into action new effective measures and mechanisms for establishing a foreseeable regulatory activity and preventive control. Furthermore, we strengthened the risk-based supervision, as well as the coordinated supervision, in case where other bodies take part in its performance. We also succeeded in achieving the point at which Bulgarian insurers maintain adequate level of their reserves, whereat they fulfil the requirements on insolvency set in the Insurance Code. We control pension funds’ investment portfolios in a manner allowing their proper structuring and strong diversification. At the time, they have adequate reserves at their disposal, which ensure them payout of lifetime pensions. I believe that FSC maintains an extremely adequate position in reference to crisis cases and acts in best coordination with the international bodies.

In your opinion, which role in the future will play new technologies in the financial markets development?

The technologies function as both catalyst and momentum, as regards the financial industry design. They change financial markets, while the artificial intelligence and the development of IT environment assume more and more significant role in the trading algorithms and the risk management. In the financial area, they signify our contemporary and future status. Thus, I would like to point out our main task. Technologies will continue to develop at extremely spanking pace, therefore the financial services industry is in charge of balancing between innovations, consumer security and stable supervision, which is necessary to protect market integrity. Therein lies the most important role played by the Financial Supervision Commission – guaranteeing stability and safety and supporting business development and consumer services.

“THE POWER IS A TOOL FOR STATE AND INSTITUTIONS DEVELOPMENT. IT IS MOTIVATION TO ACHIEVE RESULTS, BUT NOT AN END IN ITSELF”

Mr. Atanasov, as regards both your personality and profession, do you have a role model which you are following, i.e. is there any person you were taught by, or whose achievements you had been admiring?

Sure. I was taught by my parents. The parental pattern serves as a signpost on our way, which we have to consider. I also learn from people which I have chosen to share my life with, namely from my family and my friends. It is sensible when you can everyday learn something new and upgrade, instead of making for yourself idols!

How do you take a rest after the strained daily routine? Do you practice any sports? Do you have any hobbies?

 The more dynamic the day, the calmer should be the time we dedicate to ourselves. In my view, the time out of the office should be spent for rest and recreation, walks in the nature, good food tasting, meeting friends etc. Nowadays, more than ever, we could combine many pleasant occupations like recreation through watching a nice movie, a walk with an audio book, going on a journey, spending time with friends etc. I do adore the communication with my children. They are curious and cosmopolitan, pose many questions and so you see how they upgrade their knowledge.

Which are your favorite destinations for spending pleasant holidays or for a weekend trip?

In my opinion, trips give you the opportunity to discover new horizons, to get away from your daily routine, to focus on the bigger picture, and sometimes to think about issues, which I never succeed to enclose in my structured timetable. The place which usually boosts my energy, especially in winter, are the Rhodope mountains. The village of Gela is a marvelous start point for walks or for more ambitious mountain hikes. In the summer time, it is turn of other two mountains – Strandzha and Sakar where I usually spend at least a weekend in each of them. I like to travel about Bulgaria and Greece. We have marvelous mountains and gorgeous beaches. Our most important mission of parents is to reveal the beauty of Bulgaria to our children, so that they grow up cultivating their love for the homeland.

Would you tell us anything more about your family! How do you intend to spend Christmas and New Year holidays?

I have a great and warm-hearted family. As you know, holidays are the time for family traditions and much calmness in your home’s ambience. My parents are wonderful persons, my children are curious, so the time spent with them is invaluable. I believe that the forthcoming holidays will be time for tranquility, shared emotions and repose.

What would you wish for yourself and all Bulgarians for the upcoming New Year 2024?

I wish for ourselves to believe more strongly that tomorrow Bulgaria will become a better place to live in. Moreover, to be responsible today, to build up, to create, to support new ideas, to provoke peoples’ development, as well as the one of the business and the state. But first of all, I wish for myself to give more opportunities to people who need them, so that more innovative ideas, new trends and life security in Bulgaria come into being.

The Financial Supervision Commission has sent notification about its consent for the portfolio transfer from Aetna Health Insurance Company of Europe Designated Activity Company to AWL Health & Life

The Financial Supervision Commission (FSC) has been notified by the competent authority of the Republic of Ireland (Central Bank of Ireland) of the forthcoming portfolio transfer from the insurance undertaking Aetna Health Insurance Company of Europe Designated Activity Company to AWL Health & Life, including insurance contracts on which the Republic of Bulgaria is a Member State where the risk is located. After reviewing the portfolio documents, the FSC decided to send a letter to the national competent authority of the Republic of Ireland on granting consent for the transfer of the insurance portfolio from the Aetna Health Insurance Company of Europe Designated Activity Company to AWL Health & Life.

The Financial Supervision Commission presented the project Unified Information System

The contractor of the project “Scale Focus” AD presented the Unified Information System (UIS) and its functionalities to more than 170 representatives of companies and associations from the non-banking financial sector, as part of the implementation of the Project “Building a Unified Information System (UIS) for the needs of the Financial Supervision Commission”, carried out with the financial support of the Operational Program “Good Governance”, co-financed by the European Union through the European Social Fund, under a Grant Agreement aid No. BG05SFOP001-1.011-0001-C01 / 23.07.2020 with the beneficiary Financial Supervision Commission.

The Secretary General of FSC – Ms. Denitsa Kirova shared with the large audience her thoughts saying that “with the implementation of UIS, the Bulgarian regulator is improving the process of serving citizens and businesses. Digital access to our administrative services saves time, integrates the activities and processes of the Commission with the systems of the European regulators. The UIS is designed to streamline regulatory and supervisory processes. It creates a sustainable and positive work environment which consolidates different data sources, automates reporting and provides a new model of communication in the non-banking financial sector.”

DSC_0241-11

The digitization of the Commission is part of e-governance. It represents a constant priority in all national strategies and programs in the Republic of Bulgaria over the last decade. Digital solutions in the interest of citizens and businesses are a fundamental change in the administrative service model, as well as an opportunity for standardization, interoperability and resource sharing by institutions. It is the automated exchange of data between the information systems of different administrations and the national scheme for electronic identification which remains basic condition for effective e-governance in the country.

Today, in a fast-paced digital world, it is of key importance to anticipate and respond to changes, in order to ensure efficiency, transparency, and above all, communication at a whole new level between the regulator and all non-banking financial sector actors. I believe that digital transformation is not just a modern term, but rather a positive challenge and a real necessity. The implementation of digital technologies in the work of the Financial Supervisory Commission is far from an ordinary modernization of our systems, but it is also a reassessment of the way we interact with citizens and businesses. By the today’s presentation of the digital FSC, we are not only declaring our firm position to work to increase the investment potential of our country, but we are building a standard, by dint of which the Commission fully stands on the map of European regulators,” said Boyko Atanasov, Chairman of the FSC.

The UIS of the FSC comprises key horizontal components of e-government by implementing the National strategy for the development of e-government in the Republic of Bulgaria 2019-2025. As consequence of its introduction, it becomes possible to review, track, control, validate and analyze the incoming and processed information. It also provides opportunity of automated data transfer, including from and to external systems at the national and international level; the electronic administrative services (EAS) provided by the FSC are being upgraded and the Commission’s registers are being improved.

UIS implements a reliable, modern and secure way of communication with EAU applicants when submitting applications, notifications, periodic information, as well as other documents. Business processes and procedures for processing, control and analysis of data and documents are automated. The regulatory and supervisory activity of the FSC is improved by consolidating information flows and processes and creating an effective mechanism for implementing risk-based control.

The UIS also aims at guaranteeing transparent, fast and secure digital supervision, which will increase the competitiveness of Bulgaria as an investment destination, as well as upgrade the achieved level of regulatory and supervisory standards.

The Financial Supervision Commission will continue to be part of the development of technologies and digitalization, as well as actively working to achieve synergy between regulatory requirements and their implementation in a digital environment.

Part of the concrete results achieved over the past years constitute the functioning Innovation Hub, which secures  a single point of contact with fintech companies; the digital campaign – #INVEST SAFELY, which through the online space provides basic guidelines on how users can distinguish between legitimate and dishonest investment intermediaries; the mobile application FSC Mobile – to help users and supervised persons, using the most popular operating systems – Android and iOS, as well as UIS providing automation to all basic business processes in FSC.

More information about the project is available here (available only in bulgarian).

FSC and FID SANS carried out jointly training regarding the update of the NRA of the Republic of Bulgaria

In June 22nd, 2023 the Financial Supervision Commission and the Financial Intelligence Directorate – SANS conducted a training focused on topics related to the implementation of the AML/CFT measures provided for in the Law on Measures Against Money Laundering, the Law on the Measures Against the Financing of Terrorism and the acts on their implementation, organized by the Association of the Insurance Brokers in Bulgaria for its members. The event was attended by 30 representatives of members of the Association of the Insurance Brokers in Bulgaria.

In the course of the meeting were discussed the following topics:

  • update of the NRA of the Republic of Bulgaria, adopted in 2023;
  • CDD measures.

The conducted training aimed to deepen the understanding of the representatives of the insurance intermediaries which have obtained a licence under the terms and according to the procedure established by the Insurance Code, where carrying on one or more of the classes of insurance referred to in Section I of Annex No. 1 to the Insurance Code, of the importance to comply with the requirements of the preventive legislation and their essential role in the process of maintaining the stability of the financial sector and in assisting to the competent state authorities in preventing and detecting money laundering and terrorist financing activities.

Notification regarding Euroins Romania Asigurare-Reasigurare S.A.

The Financial Supervision Commission (FSC) has received a notification of a decision adopted on 17.03.2023 by the national supervisory authority of the Republic of Romania (Autoritatea de Supraveghere Financiara – ASF) to withdraw the license of the Romanian insurer Euroins Romania Asigurare-Reasigurare S.A., to open bankruptcy proceedings against this company, as well as to impose a ban on free disposal of the company’s assets.

Euroins Romania Asigurare-Reasigurare S.A. is a subsidiary, part of the group of “Euroins Insurance Group” AD, in respect of which the FSC is a group supervisory authority.

In this regard, the FSC informs that Euroins Romania Asigurare-Reasigurare S.A. does not carry out insurance activity in the Republic of Bulgaria. The decision of the Romanian supervisory authority does not affect the insured persons within the Bulgarian insurance companies of the Euroins Insurance Group AD group. The FSC has not identified solvency risks and compliance issues with the Individual companies of the Euroins Insurance Group AD and the group as a whole, resulting from the decision of ASF.

The Financial Supervision Commission will notify the Bulgarian public upon receiving additional information on this case in Romania.

The Financial Supervision Commission has sent notification about its consent for the portfolio transfer from “Societa Cattolica di Assicurazione S.p.A.”to“Generali Italia S.p.A.”

The Financial Supervision Commission (FSC) has been notified by the competent authority of the Republic of Italy (IVASS) of the forthcoming portfolio transfer from the insurance undertaking “Societa Cattolica di Assicurazione S.p.A.” to “Generali Italia S.p.A.”, both with head offices in the Republic of Italy. After reviewing the portfolio documents, the FSC decided to send a letter to the national competent authority of the Republic of Italy on granting consent for the transfer of the insurance portfolio from the “Societa Cattolica di Assicurazione S.p.A.” to “Generali Italia S.p.A.”.

After the insurance portfolio transfer “Societa Cattolica di Assicurazione S.p.A.” to “Generali Italia S.p.A.” will continue to operate on the territory of the Republic of Bulgaria under the conditions of the freedom to provide services.