'Financial sector does not get the space to innovate'
While the financial sector accounts for much of the economy, it barely gets room to innovate. She is bound by regulations that still stem from the time of the old sector, says Don Ginsel - founder of interest representative Holland FinTech. Alternative financing, Big Data and blockchain? The guidelines for this are missing
While the financial sector accounts for much of the economy, it barely gets room to innovate. She is bound by regulations that still stem from the time of the old sector, says Don Ginsel - founder of interest representative Holland FinTech.
Alternative financing, Big Data and blockchain? The guidelines for this are missing. It is no coincidence that no less than 42 percent of the investment money in Europe goes to the United Kingdom and Ireland. The Netherlands was still good for 21 percent last year, but 82 percent of that went to one company: Adyen.
Various experts and companies from the sector recently joined a round table discussion to discuss the state of affairs with the standing committee Finance from the House of Representatives. On the same day, Holland FinTech, together with consultancy firm Roland Berger, carried out a study in which it warned of a lack of knowledge among supervisors and oppressive regulations. Is the ambition now to become a leader or does the Netherlands only want to facilitate and follow, the researchers wonder. Now the sector is only inhibited in the development, they conclude on the basis of expert interviews and a survey.
For an outsider, it may sound a bit overpowering to sound the alarm now, but Ginsel says, if the development of fintech is left behind, it will harm the entire economy. Fintech is about much more than banks and insurers that have to digitize. 'Fintech is the tool and therefore the perspective of the BV Netherlands. Companies are financially and administratively facilitated with that tool. The most important thing is to make their work easier. To give an example: the greatest inefficiencies in the economy are government-related. About 20 percent of the healthcare costs are related to the administrative burden. Fintech can naturally also play a role in this. '
According to Ginsel, that realization is now. 'The next step is to adjust the order accordingly.' Not so long after the round table discussion Minister Dijsselbloem paid a visit to a few startups. He then offered to look into the possibilities of appointing an ambassador for the sector, a representative who is now there. But he also said to the Financieele Dagblad: the climate is actually very good in the Netherlands. We are far ahead in comparison to the rest of Europe. The researchers conclude differently. For example, the British are much more positive about regulation, supervision and cooperation between parties.
Under which part of the regulation is fintech now operating?
"It is not up to Holland FinTech to say which line is wrong. We are only there to give a generalist image. But: the rules are essentially outdated. They do not fit with the current financial structures. We do not say that specific rules should change, but that there must be the flexibility to be able to reconsider them. And that flexibility is lacking now. The legislator and supervisor are often not able to quickly assess whether such an adjustment is necessary. To give a recent example: the creation of a deposit bank (which only facilitates payment transactions, but does not provide loans, ed.) Turned out to be impossible. De Nederlandsche Bank (DNB) did not have an existing type of license for it. "
Ali Niknam experienced similar troubles, he said after the establishment of Bunq. For the application for a license at DNB, he had to have a complete business case. And that is difficult as a starter. 'To make a financial prediction, you need, among other things, a quote from the key payment systems you want to join. Only the companies behind those systems will only issue a quotation if you have a banking license, "he told de Volkskrant.
On which level do you want to change something?
"That's mainly in the time-to-market. How quickly do innovative companies have access to resources, permits and the right talent. In the Netherlands, we have been so startled by the economic crisis that we have forgotten the infrastructure that is now under pressure. As a result, we as a country will soon no longer be financially flexible enough to try other earning and business models. There is no point in being stricter than other countries. If the Netherlands deliberately or unconsciously blocks the innovation, a company simply applies for the license in another country. You should tackle unwanted fintech developments at the European level.
"I also advocate a test environment in which supervisors and companies can test new techniques. Even before a company launches a service, one can jointly view the elaboration among a small group of users. What is happening? How is data or customer handled? Now you sometimes have to wait months or years for a permit because the supervisor will be looked at if there is something wrong with the service after launch. You take that off earlier during a test. Both parties must have the right to pull the plug. "
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"Those companies simply remain necessary. But now they are partly moving with their hands tied behind their backs. There must be room for maneuver to seek cooperation. The number of successful partnerships is therefore still limited. The companies also all speak their own language. The traditional companies talk in 'risk and compliance', startups speak in technology and customers. There is experimenting, but there is also a lot of incomprehension. There is no golden formula for this new situation.
"Maybe that's why the role of intermediaries is growing: a medium-sized intermediary that is stable and large enough to provide services to corporates, but understands startups. Consultancy companies therefore also look at their possible role in this. Ultimately, traditional companies know that they must remain relevant internationally. This is only possible if they have access to the best fintech companies. They also benefit from a good climate. "