ROMANIA Trends and Developments Contributed by: Sergiu-Traian Vasilescu, Luca Dejan, Bogdan Rotaru and Ana-Maria Bută, VD Law Group
thus ensuring professionalism and transparency in this field. Due to an increased interest from investors, Romania is gradually but surely emerging as a viable host for a number of crowdfunding plat - forms looking to initiate operations on the local market. Being relatively new to Romanian inves - tors, the industry is experiencing remarkable growth in both equity and debt 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 a flourishing 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 crowdfund - ing 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 efficien - cy, risk management in the banking sector and customer-centred services have led to the accel - erated adoption of the third pillar of technology and operational excellence, primarily responsi - ble for developments in artificial intelligence and machine learning integration within the Roma - nian fintech industry. Banks and other finan - cial institutions have become highly interested in applying artificial intelligence in ways that enhance decision-making capabilities, improve operational efficiency, and maintain compliance with laws in their various countries. AI-powered chatbots and virtual assistants are becoming a vital support system for digital banking, provid - ing immediate assistance to customers and per -
sonalising the confirmation of financial advice. Furthermore, the use of machine learning algo - rithms in credit scoring and risk assessment has greatly improved the accuracy of loan evalua - tion, thereby reducing the probability of default on lending facilities and consequently improv - ing the financial inclusion of under-represented communities. In Romania, artificial intelligence and machine learning are a means to combat fraud and cyber security. The shift from physical transactions to digital online banking means more safe and easy platforms for financial institutions. AI-based fraud detection systems identify irregularities and possible fraud by analysing more precisely transactions in real time. Predictive analytics allow financial service providers to foresee mar - ket fluctuations and customer behaviours so as to have more adaptive and resilient financial plans. The Romanian government, in line with EU regulations, is encouraging AI in the fintech ecosystem while, at the same time, ensuring that any use of such technologies complies with data protection laws such as the GDPR, while giv - ing innovations the needed safe environment to operate freely. Blockchain and decentralised finance (DeFi) expansion Romania is an appealing region for blockchain and crypto-assets, and is a breeding ground for market innovation in terms of financial stability. An increasing number of blockchain projects, DeFi platforms, tokenised assets and improved payment systems are all on the rise, attracting local and international players. Fintech industries will only flourish with block - chain technology because of decentralisation, irreversibility and simplicity in promoting cred - ibility and transparency in the transaction pro -
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