The Netherlands has the potential to become a fintech hub, but only if the country’s regulatory framework is overhauled and banks, startups and government improve cooperation, according to a new report.
With technology transforming all aspects of the financial services industry and money pouring into the firms leading the change, countries and cities around the world are jockeying to become fintech hubs.
In Europe London has established itself as the fintech centre, but the Netherlands, where the financial sector generates seven per cent of GDP, wants to join the likes of Berlin and Helsinki in providing an alternative.
A new report from Rabobank, ING, Holland FinTech and Roland Berger takes London as a role model and identifies three barriers to success: outdated regulation, insufficient expertise at the watchdogs, and poor cooperation between startups, existing players and government.
Set up for the traditional financial sector, regulatory and legal frameworks are not clear-cut for things like crowdfunding, blockchain technology, or the handling of information about payment streams, says the report , which also claims that innovation is hampered by some of the most stringent rules in the EU.
Meanwhile, there is a lack of consistency between regulators, with De Nederlandsche Bank and the Netherlands Authority for the Financial Markets sometimes differing in their assessments of the same fintech company because of a lack of expertise or guidance.
The report also says that different players in the ecosystem tend to work in isolation, and calls on big banks, government and startups to cooperate in order to accelerate and improve the quality of innovation.
Don Ginsel, director, Holland FinTech, says: “If the government, regulators and private players do their homework, fintech can become the next ‘mainport’ of the Netherlands: or should we say the next ‘payport’.”