The Connector.
The Connector.
The Connector Podcast - DFS Digital Finance Summit - Fixing Europe’s Fragmented Credit Data For Real Financial Mobility
We explore how Europe’s fragmented credit data blocks fair lending for people who move across borders, and how Mifundo connects bureaus and banks to make financial identities portable. We share progress to 17 countries, the mindset shift lenders need, and how to use AI under EU high‑risk rules without black boxes.
• fragmentation of European credit data and its impact on borrowers
• difference between cross‑border credit and financial mobility
• historical and regulatory reasons for national silos
• access barriers to registries and legal limitations
• mindset and cultural inertia within banks and supervisors
• Mifundo’s coverage of 17 countries and 70% of population
• bank partnerships across Spain, Greece, Romania, Scandinavia and the Baltics
• ecosystem goal serving bureaus, banks and consumers
• AI usage with transparency under the EU AI Act
• practical endgame: seamless lending regardless of borders
Please find me on LinkedIn. You can contact me there or via email as well.
To connect and keep up to date with all the latest, head over to www.jointheconnector.com or hit subscribe via your podcast streaming platform
Thank you for tuning into our podcast about global trends in the FinTech industry.
Check out our podcast channel.
Learn more about The Connector.
Follow us on LinkedIn.
Cheers
Koen Vanderhoydonk
koen.vanderhoydonk@jointheconnector.com
#FinTech #RegTech #Scaleup #WealthTech
Welcome to the Connector Podcast, an ongoing conversation connecting fintechs, banks, and regulators worldwide. Join CEO and founder Owen van der Hoydong as you learn more about the latest available trends and solutions in the market.
SPEAKER_02:Welcome for another podcast here at DFS. And today I've got Kaito with me. Kaito from MiFundo. Hello, Gun. Happy to be here. Oh, likewise. So can you tell us a little bit more about yourself and also about the company?
SPEAKER_01:Uh yeah, I'm uh Kaito, CEO and uh founder of MiFundo. Before founding MiFundo, I actually spent 15 years of my life in building up a bank which operates in nine countries in Europe. And uh, we should do a separate podcast on that. Yes, but you know that on that moment I was really naive at we have really one single market in Europe, and once you have a banking license, it's very easy to build up lending operations all over Europe. And and based on this being naive on that moment, that was the reason we built a company called MiFundo.
SPEAKER_02:Uh-huh. That's an interesting one. And before we actually dive into what MiFundo does, I think you're also very active in the fintech association part, right?
SPEAKER_01:Yeah, true. I'm uh also a board member in uh Finance Estonia, which is a FinTech Association in Estonia, and uh also active in European Digital Finance Association as well.
SPEAKER_02:Ah, at fa. So now let's deep dive a little bit in uh MiFundo. Uh, what do you guys exactly solve?
SPEAKER_01:We are solving the fragmentation of European credit data. Easy sample. Like uh let's go. Let's go. In uh, for example, in US, it's extremely easy for American people to relocate from New York to California to buy a new house, get a mortgage without any problems and hassles. Unfortunately, it's not the same in Europe. You might have a brilliant credit history in your country, but once you're moving to any other country, you're nobody. Banks do not trust you. And why? Because in US they have one single mechanism used by the banks over US, trusted by the banks over US. In Europe, nothing like that. We have uh uh isolated autonomous uh systems in every single country, uh how to keep the credit records, how to use the credit records, and that's the reason. You might uh move to another country, but your data is not moving with you, and you are invisible to the banks in other countries.
SPEAKER_02:And would you say so? We're in essence talking about cross-border credit.
SPEAKER_01:Uh yes, uh cross-border credit or also like financial mobility, so it doesn't have to be mandatorily cross-border credit, it might be also domestic credit, but you as a borrower uh have citizenship from another country.
SPEAKER_02:And no, I get the nuance, and I think the way you explain it actually makes it bigger than only cross-border credit.
SPEAKER_01:Uh sure, there is uh essential uh essential difference uh because usually cross-border credit is treated that uh you are lending money abroad to someone who is living abroad, but now a person is living in the same country where a bank is uh located in.
SPEAKER_02:And what would you think are the reasons why um we came up to such a situation?
SPEAKER_01:I think it's purely historical situation in Europe. Uh if you're looking backwards, uh we have Europe has been uh um like a continent of uh wide range of tribes, if you can say so, different cultures, and honestly, that's the richness of Europe. I totally agree. I totally agree. That's kind of diversity, super brilliant. It's it it's bring it bringing like a great creativity, the best solutions. But what is uh missing, or what has has been missing, this is harmonization, and uh I think uh uh credit vertical in the financial sector, this is a field that uh politicians in Europe have tried to fix for the last 20 plus years, but they haven't been capable to do it.
SPEAKER_02:So we're talking about regulatory hurdles. So, what would you consider to be your biggest challenge today when it comes to the regulations?
SPEAKER_01:I would say we have uh had multiple challenges, uh, and that's probably the reason why it has been pretty difficult to fix. Um, because it's not that plain vanilla that you're solving one um hurdle and then job is done. No, it's uh like a uh array of uh challenges. And first challenge while my funda started, actually it was accessing to the credit data. What what uh what do I mean is that uh usually, or not usually, but let's say quite often in some countries, the national law foresees that the credit registry data is shared only to the domestic banks in that particular country. But uh but this legislation was uh approved like a long time ago, maybe people didn't even see that uh that there is a such kind of harmonization coming in future. And that's the reason that the banks in other EU member states not accessing to this uh information. So once a person is moving and bank in other countries needs to be.
SPEAKER_02:Are you saying it's um it's a mechanic that doesn't exist because they don't want, or or is it the fact that the regulation is still stringent and keeps it within the country that's holding you back as MiFonda?
SPEAKER_01:Uh I I think uh there are actually both levels. One is regulations, and second layer is mindset layer.
SPEAKER_02:And uh you said there were multiple, so we're peeling off the onion here.
SPEAKER_01:There are there are there are multiple uh hurdles, definitely. But what we have been capable to achieve, MiFonda has been capable to reach to a critical mass of credit uh bureaus. We are covering right now 17 countries in Europe and 70% of population. So it means whatever bank in European Union wants to access the credit data of their foreign customers, then 70% probability that they are getting it through the fondo. So we have reached this point, so it's not number one hurdle anymore. And right now I would say that we have reached this mindset question. Uh what because what I have seen uh it's not any like uh topic in one particular country, it's I would say it's a European topic. It's everywhere but uh uh but typically quite often people uh tanks, uh also uh supervisors think that uh that our citizens in our country they are uh the best ones, good ones, but anyone who is from other EU member states it's it's it's it's not it's it's not as good.
SPEAKER_02:But uh is it then the level of trust of the the local systems and the assessments? Is that what you're saying?
SPEAKER_01:Or I think it has uh two reasons. First reason is uh missing information. Of course, whatever kind of thing where you don't have information, it's higher risk, not naturally. But if you don't know, you don't know it's uh better to avoid. So so simple.
SPEAKER_02:You cannot mitigate. If you don't know, you cannot mitigate.
SPEAKER_01:Exactly. So this problem I would say is solved because data is flowing, data is moving, and MiFundo ensures the same equal level information to you to your bank as available for the banks in that other country where info is coming from. So you have access to information. So so and this is why we have reached to a second layer. It's a just a mindset and cultural uh layer that uh uh it's like inertia that that you have you have used to behave like that. But once you have access to this information, basically there should be like a shift in a mindset that okay, uh right now I have a much bigger pool of information. Same about uh same about the situation while Schengen was created. Okay, in the beginning uh you had a chance to move freely in your own country, but but once Schengen was established, you got the freedom to move freely. Yeah, in a wide wider range of countries. Schengen grew so even more and more, and uh that was a shift of a mindset. Uh and say say same about the credit data.
SPEAKER_02:Well, for me, the end game is clear. So, how would you just or when would you think that endgame is happening? When is it unfolding?
SPEAKER_01:You wanted yesterday, but you said that you know very well what is end game, but what is end game? What is it? Then I can answer the end game.
SPEAKER_02:Well, I think what you're describing is um a world where banks understand that this is possible and that they also grant um credits to people that are not necessarily in their own living in their own country. So you have much more freedom and flexibility to get a loan across Europe.
SPEAKER_01:Uh yes. I hope I described this correctly, but you tell me. Yes, in that sense, true. But uh typically in Europe right now, there is no big difference if you're moving between uh two cities inside one country. Let's say Brussels to uh Leech, like no difference. But once you're moving to uh any other city outside of a country, like a Lille to Brussels, it's a trouble, probably. Like because it's a different country, and we have so many situations uh in uh Europe that uh two cities very well connected to each other and uh and people are moving between these cities, but unfortunately, country border between and and uh and these people are not trusted as uh as as people which are moving between two cities in the same country uh inside the same country. So if we are reaching to the point where banks are actively using the credit data from other countries, basically there is no difference if a person is moving between Brussels and Leech or moving between Brussels and uh Lille, Brussels, uh Amsterdam, Brussels, Berlin. No difference.
SPEAKER_02:No, and that's why you were saying that there need there need to be the bank or the the ones that's providing the credit that is making this possible, right? The willingness to actually take that as a product offering. I think that's that's if I understood well, that that is the biggest challenge at the moment. Or is there another bigger challenge?
SPEAKER_01:Yeah, yeah yes, uh we have uh in the past we have already achieved uh critical mass in the case of credit bureaus. Uh I mentioned covering 70% of the population in Europe. Right now we are onboarding the banks in different countries. Um we have got uh partnerships already with uh with the banks in Spain, Greece, Romania, Scandinavia, Baltics. Uh, probably first one in Germany, first one in Belgium coming. But uh we are pretty close to this critical mass an assertive critical mass uh that there is a network over Europe that is strong enough and it allows people to move and to be served with that banks.
SPEAKER_02:Yeah, earlier you challenged me what was the end goal, but is is this the end goal for you then, or is there more to come after when the critical mass is reached?
SPEAKER_01:I would say that our end goal is to be a very good ecosystem, uh, which is used by the credit bureaus, which is used by the banks, which is used by the consumers. So we are ecosystem, and uh and uh of course, what more the ecosystem is used, that the more happy we are because we have created valuable solution to the market.
SPEAKER_02:Well, it brings me a little bit to my next question because very often MiFundo is framed as being fintech for good. Do you think that is uh well-deserved?
SPEAKER_01:Of course, I think it's uh it's a it's uh it's the right uh right description because uh this is uh what uh motivates all our team members, which triggers us because we believe that we are not just building a fintech solution. It's much wider. It has meaning, it has deeper meaning and uh it has impact. What that triggers that's the reason we are coming uh to work every morning.
SPEAKER_02:Makes sense. I think it goes close and hand in hand with the notion of an ecosystem, I would say.
SPEAKER_01:Because our team wants to solve the problem uh these people have, we want to solve a problem that banks have in Europe, we want to solve a problem European Union has, it's a systematic problem, and uh and uh we want to use our knowledge experience uh to achieve such kind of impact to a society.
SPEAKER_02:And I hope you will be very successful with this. Um moving a little bit away from um the more product and human side, a more technical side, um, because you're here at an event where one of the topics is AI. Is Mifundo already using AI?
SPEAKER_01:I think nowadays probably every company is using uh AI, just the question is in which extent uh which use cases, etc. Um, in our case uh we are using but we are cautious in that matter. Uh why? Uh because uh at first we have to understand that we are processing sensitive information. So and once you're processing sensitive data, you have to be extra careful uh how do you process it. Second, um talking about uh EU AI Act, which is klassifying uh different kinds of AI use cases into uh categories. Credit scoring is klassified as high risk uh uses. So it's possible to use AI but very very strong diligence has to be in place. And anyway, what's the most important if introducing such kind of solution and to the to the banks, and while the banks are experiencing it, uh studying it it's uh transparency. So it means that definitely it's not possible to use any black box mechanism to passport the information, give uh credit score etc. Because no meaning there. Even if there is any kind of statistical meaning. But but banks want to get transparent information about that particular person in another country and put it together where cross-border data, domestic data, and full picture is uh achieved. And only after that, after this main information is very well passported, understandable, on that moment later on, it's it's it's possible to model uh different kinds of scorings.
SPEAKER_02:Kaito, since you're a serial entrepreneur but also very much attached to the fintech industry, I would like to ask you pick your brain a little bit on what excites you the most on what's happening in our fintech landscape, and and how do you see it changing in the next uh few years?
SPEAKER_01:If you're talking about Europe, then I'm most passionate about one single market, and uh and doesn't matter what kind of uh vertical we are talking about, so all these uh uh technologies or regulations impacting uh impacting that. So I'm not I I cannot say that I'm very uh enthusiastic about that technology or rat technology, but more like uh mission, uh mission-driven.
SPEAKER_02:Very mission-driven. So if anyone listening to this podcast has the mission to contact you, how do they how do they have to do that?
SPEAKER_01:It's uh very easy. Please find me in LinkedIn. Uh you can contact me there or uh or uh over email as well.
SPEAKER_02:Perfect. And I will make sure that uh the contact details are mentioned and below in the podcast. So that's it. We're already at the end of this podcast. Kaito, thank you so much for this uh nice conversation. Thank you also to the audience, and uh please stay tuned. More news to come from this beautiful and majestic DFS 2025. Thank you very much. Thank you.
SPEAKER_00:You're welcome. Thanks for listening to another episode of the Connector Podcast. To connect and keep up to date with all the latest, head over to www.jointheconnector.com or hit subscribe via your podcast streaming platform.