The credit business through fintech has managed to expand access to financing for a broader audience that often was not served by traditional banking. Despite this, the inherent risks of this business and financial crises have generated uncertainty regarding interest rates and customer solvency, which has led to only a few fintechs dedicated to this sector being able to consolidate. Many P2P lending platforms, microcredits, and loans aimed at specific groups have not achieved the expected profitability, and some have had to close or change their business model.
BNPL (buy now pay later) are now at a crossroads where they must adapt or disappear. Despite the challenges, fintechs dedicated to financing have had a positive impact by expanding access to credit and improving granting processes. However, the arrival of a new consumer credit directive in the European Union is changing the regulatory landscape and will affect the consumer financing market in Spain.
The new regulation seeks to strengthen consumer protection and requires BNPL entities to compete under the same rules as traditional financial entities. This regulatory change will also influence the acquisition strategies and results of companies dedicated to financing. Additionally, traditional entities are expected to take advantage of the situation to adapt to these new regulations.
The new consumer credit directive, which will come into effect in 2026, aims to adapt the financing business to the digital age and the needs of customers, with the goal of preventing consumer over-indebtedness. Regulators such as the Ombudsman and the Bank of Spain are examining consumer protection in the field of microcredits.
Regulation in other countries, such as China, has proven effective in reducing over-indebtedness and improving financial practices. Companies like Revolut are also adapting their financial services to comply with the new regulations and offer more responsible payment options.
In summary, the new regulation in the financing sector aims to balance innovation, financial inclusion, and consumer protection. These measures are expected to strengthen the sector's solvency without losing the advantages that new financing solutions offer to consumers and businesses.
