FinTechs in Europe: Can the Old Continent become a FinTech capital?
More and more startups worldwide and trying to redefine the rules of the world of finance. It’s a fascinating process, especially when we talk about fintechs that combine the fast paced innovation from the technology sector with the grand liquidity of the financial services.
Even though the adoption rate of fintech around the globe today is highest in China and India (no doubt that it is highly influenced by the huge amount of mobile payments in these countries), the fintech scene in Europe is actually booming.
A number of technological changes and new regulations are coming in place to shake up the incumbent financial system and make a significant change in European financial scenery.
A very important piece of legislation is the European Union’s PSD2 (short for Payment Service Directive 2), which requires banks to share current account information to third-parties though APIs. This is a huge development and step forward as until now financial institutions have remained very cautious and restrictive regarding the technological changes and collaboration with other businesses. Further, it is a very significant move as newcomers are actually able to pick up where longstanding conventional banks have left off.
Another important moment is the recent enforcement of GDPR (General Data Protection Regulation) which requires more innovative ways to secure customers’ data – and fintechs can become one of the most important players in this field.
So all in all, Europe has a definite potential to become the leader in fintech market. Apart from the legal part, it has a great combination of economic and social factors, most importantly – a highly tech-literate population. It is a popular opinion by the industry experts that the only things left now are fostering an environment of constant innovation, information-sharing and increasing the access to talent. And the rest will follow.