EU must make the most of its FinTech potential

The EU is catching up with many parts of the world where the FinTech revolution has been at the heart of economic development for a much longer period, writes Brian Hayes.

Brian Hayes | Photo credit: European Parliament audiovisual

By Brian Hayes

29 Sep 2017

It was Charles Darwin who once said that those who can adapt are ultimately those who succeed in life. The same is true in financial services. Adaptation is king, and adaptation in how we organise our financial system; how we interface with customers and meet their needs will define those businesses who succeed and fail. 

We are living in the disruption age, when businesses come and go at lightning speed. From politics to business to investment, the pace of change is breath-taking. Businesses that were once seen as impregnable by world leaders, can now be taken down in weeks.

At the heart of this disruption is the interface between finance and technology. In essence, that’s what FinTech is: an enabler to improve the transfer of money across the financial system in a reliable and cost-effective way. Bringing added value to customers and the businesses that use the technology.


FinTech brings a whole range of new opportunities for how citizens and businesses conduct their day-to-day financial operations. This can be from making rapid payments on your mobile phone to accessing finance through new and innovative platforms.

As financial services move at warp speed into the digital age, with new technology and an enhanced product and service offering, underlying all of this must be financial stability. Trust in banking and financial services must be earned for both incumbent and new players. 

In May of this year, Parliament adopted an own-initiative report on FinTech. This was the first report of its kind published by an EU institution which advocates recommendations for the future of FinTech in Europe. At the heart of the report was the need to safeguard financial stability and to ensure that consumer protection remains at its highest level when it comes to financial services.

The report calls on the Commission to present a comprehensive action plan that boosts FinTech in Europe and to examine how barriers to financial innovation can be removed.

One of the underlying principles which drove the recommendations of the report was the idea to develop a proper regulatory response to FinTech, both from a national perspective and an EU perspective. 

Some member states have highly developed regulatory regimes for FinTech, while others may only have very small FinTech industries. National regulators have come up with different approaches on monitoring and regulating FinTech developments.

While there will always be national specificities, we want to really make Europe a world leader in FinTech, we need to foster a common approach to ensure that we have a strong FinTech ecosystem in Europe. 

As things stand, the EU is catching up with many parts of the world where the FinTech revolution has been at the heart of economic development for a much longer period. The US, China and Israel host more than half of the top 10 largest FinTech companies. If Europe wants to remain competitive, rapid innovation should now be the norm.

The Commission, earlier this year, launched a public consultation on FinTech, ultimately receiving 226 submissions. The next steps will be vital and while many authorities worldwide have opted to take a patient approach to FinTech. I believe that the Commission needs to come up with a decisive action plan that will make the most of the EU’s FinTech potential.


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