Yes, we do care a lot about fintech in EMMA. Not only because it’s one of the industries in which we’ve got some really cool customers, but because it’s shape shifting our mobile and technologic future.
If you’re not too familiar with the concept, fintech (which really resembles “financial technology”) is an economic industry composed of companies that use technology to make financial services more efficient.
Some media such as Wharton Fintech describe fintech companies generally as “startups trying to disintermediate incumbent financial systems and challenge traditional corporations that are less reliant on software” (although that’s not always the scenario).
Let’s talk about european fintech
Specifically, the European Union has been working a lot on trying to regulate the continental market standards. There’s no brains to understand that a 20+ country «common marketplace» is economically worth enough for any industry, including fintech.
But, in between the enormous potential of european fintech, there’s something called «regulation needs» that works as a barrier (as well as a quality check point). That means that european fintech companies NEED licenses to make business in each country, and that licenses are only obtained trough UE’s regulatory organizations.
Being quick and short, those regulations include:
- The PSD2, for standardized mobile and Internet payments.
- The AMLD (Anti-Money Laundering Directive)
- SEPA (Standardization of electronic payments in Euro)
- MiFID2 (Harmonized regulation for investment)
- The common EU insurance regulatory regime (Solvency2)
- Among others, such as the Basel 3, for voluntary regulatory framework on bank capital adequacy.
Is it really worth a try?
Even though this looks like a lil’ bit too much for any new startup to accomplish, it’s a clear statement that if european fintech companies want to prove better, they need to gain the market’s trust.
And yes, it’s really worth the effort. Either it’s B2B or B2C context, the «universal digitization» and those already mentioned regulatory frameworks leave european fintech companies in a very opportune spot to win some market share.
We don’t want to end this without mentioning some soft points about the Brexit case. Many are worried and concerned (yep, there’s no point hiding it); it looks like a overwhelming regulatory scenario mixed with close future political and regulatory changes, but everyone has to know -or remember- that, as of today, UK’s one of the leading european fintech hubs (this is thanks to the country’s regulatory support network).