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Many-headed dragon: Is the EU creating better conditions for the development of fintech businesses?

The global fintech ranking by the UK research firm Findexable has ten European countries in the first rankings out of 20 countries, and this includes Lithuania. But can we be proud of such a result? The reasons hindering the creation of fintech solutions in Europe were discussed at the international Fintech Day conference in Vilnius.



According to Alessandra Gambrill, Head of FinTech Belgium, the European Union is a beast with as many heads as there are member states, making it very difficult to talk about it as a single market.


“Yes, the unification of laws is very advanced in the European Union. In order to achieve this, fintech associations work closely with the European Commission and the Parliament. There is certainly an effort to unify all the laws, and a lot of progress has been achieved in this area, but we are faced with the opinions of the regulators in each country,” says Ms Gambrill.


According to her, the rules laid down by the regulators certainly undermine the development of innovation. For example, in Belgium alone, two years of procedures are needed to bring the new technology developed by a fintech company into a bank.


However, Tadas Vizgirdas, Managing Director of Shift4 Payments Lithuania, pointed out that strict regulation by central banks also has positive aspects.


“Many market participants think of the word ‘regulatory’ as a swear word. It is true that compliance is time-consuming. In the end, however, security is the main concern of regulation, and this helps to innovate. In the US, for example, there are many crimes related to the theft of credit card data. In Europe, this problem has been solved in practice and the regulators have made a significant contribution to it,” says Mr Vizgirdas.



Chris Crespo, co-founder of Nordic Fintech Magazine, who came to the conference from Denmark, said that for many years Europe has been asked why there are still no super-apps. Such apps have at least a few different features, including payment for services. Examples of these apps include Grab (670 million users) in Southeast Asia and Rappi in South America. With them, you can order the delivery of food or medicine, rent a vehicle, and receive all financial services.


“Why can’t Europe have such an app, especially when it’s exactly what consumers need? The reason is not that we do not innovate. It is rather due to differences between European countries, including unresolved regulatory differences. This means that tech service developers from different countries need to join forces,” says Mr Crespo.


He believes that European super-apps are unlikely to come from fintech developers. “These innovative products usually come from retail, delivery or transport services. In Europe, we have traces of this, such as Wolt and Bolt, which invested a lot in their development, as well as Deliveroo in the United Kingdom. The crisis can force such companies to think about expanding the range of services, including financial services,” says the fintech expert.


Andrius Bičeika, Deputy Director and Board Member of Revolut, agrees, saying that 2023 would not become the year of a breakthrough in super-apps in Europe, because this requires millions of customers to attract a lot of money, and venture capital investment will be lower this year.


Chris Crespo offered another opportunity for the Lithuanian fintech sector − to intensify cooperation with the Nordic countries.


“Tech innovations in the Baltic and Nordic countries are world-class. It is enough to go to other regions of the world, and there we will find the use of cash or very old payment methods prevalent. I believe that by combining everything we have created, we will certainly be able to use it in Central or South America, in the Middle East − because in these countries we will no longer have to invent the wheel, but simply just adapt our products. Let’s export our talents, minds, and innovations − it’s beneficial for all sides,” says Chris Crespo.


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