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EC reveals plan to make Europe global fintech hub
The European Commission has unveiled proposals to boost the EU’s financial technology sector
The European Commission (EC) has released details of its plan to make Europe a global financial technology (fintech) hub through regulatory best practices, easier access to capital and a fintech lab.
The commission said its Fintech Action Plan is intended to align EU rules with rapid advances in new technologies, such as blockchain, artificial intelligence and cloud services.
The plan sets out 23 steps to “enable innovative business models to scale up, support the uptake of new technologies, increase cyber security and the integrity of the financial system”, said the EC.
These include: the EU Fintech Laboratory, where European and national authorities will engage with tech providers; the Blockchain Observatory and Forum, which will monitor blockchain developments and ensure EU organisations are engaged in the industry; workshops to improve information-sharing concerning cyber security; and best practices on regulatory sandboxes.
The EC will also introduce new rules on crowdfunding, which could help fintech startups and other small businesses raise investment funds. Crowdfunding platforms enable startups and early-stage companies to raise money from many different sources. The proposed regulation would allow these platforms to apply for an EU label based on a single set of rules so they can offer their services across the EU. Currently, different rules apply in different EU states.
The UK has a strong fintech sector but is leaving the EU, with its fintech companies potentially losing access to the EU single market. The EC wants to attract fintechs to EU countries.
Tech hubs in Paris, Berlin, Amsterdam and Nordic cities are alternatives to London and other UK cities, but Brexit might reduce the amount of capital available to fintechs.
Read more about fintech in Europe
- Fintech is one of the most promising tech sectors in the UK, but it could be the one that suffers the most as a result of the UK leaving the EU.
- The number of English-speaking jobs advertised in Berlin, Paris and Amsterdam has jumped since the UK’s Brexit referendum in June 2016, with the German capital looking for the most tech professionals.
- London-based tech firms received record levels of venture capital funding last year.
“To compete globally, Europe’s innovative companies need access to capital, space to experiment and scale to grow. This is the premise for our plan,” said Valdis Dombrovskis, EC vice-president responsible for financial stability, financial serves and capital markets union. “It is more important that we develop investment in innovation across the EU as there are going to be consequences from the EU’s largest market leaving the EU.”
Wim Mijs, CEO at the European Banking Federation, said that to fuel fintech, there needs to be a European ecosystem that allows financial services providers to be globally competitive.
“The commission needs to serve as a catalyst so that we can ignite this cross-border fintech ecosystem with a flourishing digital single market,” he said. “Only a real single market that is solidly underpinned by innovative, secure and reliable financial services can secure the jobs and growth we want.”
