Innovation in Banking: A Conversation with Priit Põldoja, CEO of Inbank

"Crisis often sparks opportunity," reflects Priit Põldoja, CEO and founder of Estonia-based Inbank. With over 30 years in banking and fintech, Põldoja has seen firsthand how challenging times can foster innovation. Founded amidst the aftermath of the 2008 financial crisis, Inbank emerged as a pioneering force in embedded finance, reshaping consumer lending and making significant strides across Europe.

Inbank's story began when major banks retreated from consumer finance, leaving a clear opportunity in the market. "We saw that banks were pulling away from risk and innovation," explains Põldoja. "Our goal was simple yet bold: deliver seamless consumer finance directly through merchants." What set Inbank apart was its groundbreaking approach—an automated credit decision made within minutes right at the point of sale, a feature unheard of at the time.

Since securing its European banking license in 2015, Inbank has rapidly expanded into Lithuania, Poland, Czechia, and Latvia, with further outreach through platforms like Raisin into Germany, the Netherlands, and Austria. But expansion brought lessons, notably the challenges of navigating diverse European regulations. "The European market isn't as unified in reality as on paper," Põldoja admits. Each country demanded tailored solutions for identification, KYC, AML procedures, and integration with local credit bureaus. Despite these hurdles, Inbank consistently gained market share through its agile, adaptable strategy.

A cornerstone of Inbank’s innovation is its willingness to venture beyond traditional banking products. One standout initiative is its electronics rental service, beginning with Apple products. "We saw a logical opportunity here," says Põldoja, highlighting how devices like smartphones retain significant residual value, akin to cars. By renting devices instead of outright selling, Inbank lowers upfront consumer costs, bundles valuable services like insurance, and promotes sustainability through device recycling.

The bank’s forward-thinking extends into renewable energy, as evidenced by its synthetic securitization deal backed by solar panel loans in Poland. This strategic move aligns seamlessly with Inbank’s broader sustainability ambitions, enabling Polish households to afford solar installations conveniently financed at the point of installation. "This approach not only supports sustainability but also helps us manage our capital more effectively," Põldoja notes, underscoring the dual benefits of sustainable finance and prudent capital management.

Inbank’s recent issue of subordinated bonds on Nasdaq Tallinn has further bolstered its capital position, with strong investor confidence underscoring the bank's credibility and robust growth prospects. According to Põldoja, this move is essential to their capital strategy, enabling more ambitious expansion and innovation.

Underpinning all these achievements is Inbank’s technological prowess. From its inception, technology has been central to enhancing customer journeys. Whether it’s financing cars, electronics, or home improvements, each service is meticulously tailored to the customer's purchasing experience. The goal is clear: simplify finance and seamlessly embed it into everyday transactions. This customer-centric approach positions Inbank uniquely, drawing volumes away from traditional banks toward their frictionless solutions.

In terms of technological innovation, Põldoja believes Inbank is well-placed to harness the power of artificial intelligence (AI), though he acknowledges it's still early days. "We've already implemented machine learning extensively in credit decisions, and AI is naturally the next step," he explains, envisioning future scenarios where customers effortlessly finance purchases through fully automated, AI-driven platforms.

Collaboration also plays a crucial role in Inbank’s growth. "We see ourselves as a fintech with a banking license," Põldoja says. The bank actively collaborates with fintech companies and traditional banks, leveraging each other's strengths. One notable collaboration is with Raisin, a pan-European deposit platform, which significantly broadened Inbank's depositor base across multiple countries. Upcoming partnerships with major European retail banks further reflect the bank's flexible, partnership-driven strategy.

Looking ahead, Põldoja remains optimistic yet pragmatic. "The future is embedded finance," he asserts confidently. "Technology continues to break down barriers, making financial services more accessible and convenient than ever before. Our aim is to lead this transformation across Europe, constantly innovating and adapting."

Põldoja’s vision is clear: continue pioneering, remain agile, and build lasting partnerships. It’s a formula that has served Inbank well, promising exciting developments for this ambitious Estonian bank.