ROMANIA Trends and Developments Contributed by: Sergiu-Traian Vasilescu, Luca Dejan, Bogdan Rotaru and Ana-Maria Bută, VD Law Group
crowdfunding, with numerous successful initiatives over the past two years and an even more impressive number of projects still in the pipeline. The crowdfunding sector in Romania is currently experiencing healthy momentum, attracting both entrepreneurs and capital investors seeking funding for innovative projects. Many investors are attracted by the portfolio diversification and potential returns associated with crowdfunding projects. In addition, the existing legislative framework creates confidence for both investors and project developers. Artificial intelligence and machine learning integration Emerging needs to improve operational efficiency, risk management in the banking sector and customer- centred services have led to the accelerated adop - tion of the third pillar of technology and operational excellence, primarily responsible for developments in AI and machine-learning integration within the Roma - nian fintech industry. Banks and other financial insti - tutions have become highly interested in applying AI in ways that enhance decision-making capabilities, improve operational efficiency, and maintain compli - ance with laws in their various countries. AI-powered chatbots and virtual assistants are becoming a vital support system for digital banking, providing imme - diate assistance to customers and personalising the confirmation of financial advice. Furthermore, the use of machine-learning algorithms in credit scoring and risk assessment has greatly improved the accuracy of loan evaluation, thereby reducing the probability of default in lending facilities and consequently improv - ing the financial inclusion of under-represented com - munities. In Romania, AI and machine learning are being used to combat fraud and enhance cybersecurity. The shift from physical transactions to digital online banking makes it easier for financial institutions to detect fraud. AI-based fraud detection systems identify irregularities and possible fraud by analysing real-time transactions more precisely. Predictive analytics allow financial service providers to foresee market fluctua - tions and customer behaviours so that they can put more adaptive and resilient financial plans in place. The Romanian government is encouraging the use of
AI in the fintech ecosystem in line with EU regulations, ensuring that the use of such technology complies with data protection laws such as the GDPR, while giving tech innovations a safe environment in which to operate. Blockchain and decentralised finance (DeFi) expansion In terms of financial stability, Romania offers an inno - vative market that appeals to blockchain and crypto- asset projects. An increasing number of blockchain projects, DeFi platforms, tokenised assets, and improved payment systems are all on the rise, attract - ing local and international players. Fintech industries will only flourish with blockchain technology where there is decentralisation, irrevers - ibility and simplicity in promoting credibility and trans - parency in the transaction process. Compared to con - ventional transactions with financial intermediaries like the banks and payment processors, blockchain speeds up the whole process, reducing the cost and processing time required for settlements. This invest - ment allows for real-time settlements and secure, simple cross-border transactions, plus, through smart contracts, it automates obligations connected with contracts, all without the need for centralised con - trol. Its uptake is fast growing across various sectors of business, such as digital identity verification and supply chain management, where its innate security and transparency afford the protection of data and maintain the integrity of operations. This shift facilitates enhanced financial inclusion by utilising alternative methods of lending, borrowing, and fund management, particularly in areas where traditional financial institutions are either absent or limited. MiCA will have a significant impact on the Romanian market and is already setting the rules of the game for crypto-asset service providers. By establishing a clear and harmonised regulatory framework across the EU, MiCA is enhancing legal certainty for businesses and investors while ensuring transparency and consumer protection. This regulation is set to transform the com - petitive environment in Romania, necessitating that market participants adhere to rigorous authorisation,
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