The European Union is having a tough time. EU citizens don’t place their trust in the EU to legislate good policies for them. They feel that it is an unnecessary bureaucracy that is being forced upon them. This feeling has caused the British to vote to leave the EU in 2016 and a rise in the anti EU sentiment across Europe. United Kingdom leaving EU was a major blow for the EU as London is a major financial market. Without any access to a major financial market like that, the EU stands to lose a lot. Although many commentators predicted that the EU will witness a huge influx of capital post Brexit, nothing of the sort has happened. It is an indication of things to come.
London has been a global financial hub due to the large number of banks, insurance companies, investment banks, fund houses and other financial institutions that have their global headquarters there. In order to support these, a lot of fintech companies have setup their bases in London over the last decade. Europe does not have this advantage!! For any financial institution to move to across EU, they need this backend support to exist and thrive in EU. The EU currently does not have enough fintech infrastructure and ready professionals to handle the scale of work that would entail if these companies got shifted. So who in their right mind would want to shift to the EU then?
The EU knows this and for that reason, they are willing to consider lowering regulatory requirements for fintech companies in order to promote talent, innovation and to reduce costs. The announcement was made by Vladis Dombrovskis, Vice President of the EU Commission. This is a great opportunity for all fintech startups and professionals who are ready to take advantage of the opportunity to strengthen and grow themselves and their business.