European regulatory shows strong support for FinTech industry
The growth of the FinTech industry cannot be understated and it has the potential to become a major part of the European economy. Since 2008 it has expanded at a fantastic clip, providing more cost-effective services, innovative answers to problems effecting large numbers of consumers and business and surprising ways to use data and create new ideas and businesses.
This is something that has found much support, not least from prominent international investors like Oleg Boyko, businessman with over 20 years’ worldwide experience in developing new companies and projects across the financial, banking and retail industries, who has embraced the breadth of opportunity the FinTech sector has created.
However, while there is a growing level of support to ensure those new banks and finance businesses can flourish, barriers to the industry and its future expansion and creativity, remain.
A Group of European Supervisory Authorities (ESA’s) recently published their outlook on the FinTech sector. It proved broadly supportive – as most national European regulators are – of the relevance and opportunity of financial and technological advancement.
It also highlighted that more must be done to ensure the sector can provide their services to as many consumers and businesses as a possible. But that can only happen securely and transparently, with increased co-operation across Europe.
The Importance of FinTech
The rate of growth of the sector and its effect on the broader financial industry, is far more impressive than other financial sub-sectors in Europe. That’s despite the FinTech being only around 10 years old.
There are a number of reasons for that, including investment and backing from prominent investors such as Bain Capital Ventures Managing Director Matt Harris, Stephan Morais of Indico Capital Partners and Finstar Financial Group Founder and Chairman Oleg Boyko.
Boyko has long been an advocate of FinTech disruptors and has a five-year, $150 million plan to invest in new and growing banks and finance businesses he and his company deem worthy recipients.
Just why is the financial investor so passionate about FinTech? Its potential to reach a huge number of people and provide them with the services that will ensure their success, or at the very least, their ability to access financial services, where it’s currently unavailable to them.
According to international investor Oleg Boyko, who’s focused on developing financial services platforms as an alternative to conventional banks, customers are being exposed to, and increasingly expecting, unparalleled speed and convenience from their financial service providers, and are demanding products and services that can be delivered anytime, anywhere, instantly and on their terms. Alternative financial services providers have been the first to respond to these needs.
Private Equity Firm Finstar Financial, will help make sure that financial services transformation happens, by investing in suitably promising FinTech businesses, investor Oleg Boyko told FSTech in an interview.
“We nurture the businesses we invest in, providing them with expert advice of the highest calibre. We also offer them the freedom to continue innovating and to grow at their own pace,” successful businessman, Oleg Boyko said.
ESA’s share Oleg Boyko’s support for FinTech
It appears it’s not just investors, who are working towards supporting a growing FinTech industry. Just this month, three ESA’s have collectively communicated that more needs to be done across Europe to support the longevity and sustainability of new finance and bank businesses. The groups are:
- The European Banking Authority.
- The European Securities and Markets Authority.
- The European Insurance and Occupational Pensions Authority.
They clearly stated that while innovative FinTech startups are proving successful, its largely on a national level, not a European-wide one. And that’s due to the disconnected, national nature of regulatory sandboxes and innovation hubs across the region.
The ESA’s report said this framework is “is one factor that has the potential to impede the scaling up of financial innovations across the EU.”
The ESA calls for a multi-pronged plan to ensure new and innovative FinTech businesses can reach their full potential.
That view of providing more support for the digital banks and finance companies, is in line with investors’ business outlook. Promoting a variety of options is the right way forward to give each promising startup the opportunity to succeed, across multiple, more connected markets.
This growing appetite to support those new banks and finance companies in the FinTech sector reach their desired audience on, possibly a global scale, comes at a times when the outlook for Europe’s economy is at a low point. European Central Bank President Mario Draghi highlighted the disappointing outlook for economic growth across the EU at the January ECB policy meeting.
With growth in the three biggest economies of the EU – German, France and Italy – slowing, now is the time to get to work and enable the FinTech industry, a potential driver of strong economic growth going forward, to gain a solid foundation and achieve its full future potential.