The European Union (EU) Executive's Vice President Valdis Dombrovskis said on Thursday, 23rd March 2017, that the Commission is considering how to regulate the expanding sector to encourage its development in Europe, while protecting consumers from risks that may emerge.
Siena is a medieval city in Tuscany, whose historic centre is a UNESCO World Heritage Site. In it, the traditional horse race named Il Palio takes place twice a year since 1633, in July and August. Ten horses and riders, who represent ten of the seventeen city quarters called contrade (contrada, in the singular form), compete in the 90-second race around Piazza del Campo. The contest is more than a competition as it is part of the pride of the city itself which relies on the rivalry of each ward.
Speaking with a peer from the banking industry, a claim arose that the problem with banks nowadays is that in the contemporary fast-paced environment, they are not able to compete with fintech disruptors and are paying for decades of missed investments in innovation.
Turning our attention to Eastern Europe, the beautiful country of Czech Republic, steeped in history, catches our attention. With focus of the fintech world concentrated on hubs such as New York, Silicon Valley, London and Berlin, Prague seems to run under the radar for the most part but given that Prague is the fifth most visited city in Europe, it can’t afford to fall behind. Looking at the figure below, we see that there are a number of successful fintech firms comprising the Czech ecosystem.
On November 10, 2016, the UK and China announced a joint initiative to provide their domestic investors with new investment opportunities while further opening their respective markets to foreign capital. Named the London-Shanghai Stock Connect, it focuses on eight key areas and ultimately aims at easing cooperation and boosting market access. Those areas range from traditional sectors such as banking and asset management but also include socially important ones, for instance financial inclusion or green finance.
Switzerland, one of the most important global financial centers and home to more than 250 banks, is actually a small of nation of 8 million people, that you may associate with world class chocolate, luxurious watches, the stunning scenery of the Alps and lakes, as well as excellent education infrastructure and unrivaled living standards. All these things and more, but probably not fintech. At least, not yet.
The alternative finance sector in France is experiencing great momentum. It’s the second largest market in Europe after the UK, with a volume that has more than doubled between 2013 and 2014 (+103%) and then again between 2014 and 2015 (+107%), reaching €319 million in the past year. France is also home to nearly half of the largest banks in Europe. The updated regulations, published in the Journal Officiel the 30th of October 2016, could be what is needed to allow the market to take off and reach the next level.
London may still be the fintech capital of Europe but in the wake of Brexit and significant growth and development in its peer nations, the German fintech ecosystem is emerging as a major player in financial technology globally. While, for some time, the domestic fintech scene was not commonly known for its breathtaking speed of innovation, things are changing rapidly.