More European fintech success impossible without ‘level playing field’

Gold-plating and difference in interpretation

“The European market is a whole in the financial field: exchanging financial resources between all EU countries is possible and increasingly easy. More and more regulations are also being created at the European level. However, there is still a lot of difference at the member state level when it comes to the regulation of banks and fintech companies,” Walgemoed said.

“First of all, there is ​‘gold-plating’: national legislation that adds rules or conditions to the European rules. This undermines the objective of creating a single European market in which economies of scale can be achieved. Besides gold-plating, there are also differences of interpretation with regard to European legislation. National supervisors provide market parties with guidelines and recommendations, which can be quite divergent. We see these national interpretation differences, for example, in the MiFID II suitability and appropriateness test, and in the interpretation of anti-money laundering legislation.” 

Consequences for Europe

Walgemoed: ​“As long as the rules on financial products and services are different or are interpreted differently in each European country, it is difficult for fintechs and banks to offer these products and services in Europe in a scalable way. And that is a shame because these providers also have a social function: they serve the so-called unbanked. In Europe, some 37 million citizens have no access to mainstream banking services. Many parties can and want to make financial services such as banking and investing accessible to everyone, but this requires European legislation that is uniformly interpreted and applied. This is the only way to create a breeding ground for even more European fintech success and thus for financial inclusion.”