Regulatory overhaul needed to make the Netherlands a fintech hub - report

Regulatory overhaul needed to make the Netherlands a fintech hub - report

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Rabobank, ING, Holland FinTech and Roland Berger takes London as a role model and identifies three barriers to success: outdated regulation, insufficient expertise at the watchdogs, and poor cooperation between startups, existing players and government.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'."

Comments: (2)

A Finextra member
A Finextra member 24 January, 2016, 06:25Be the first to give this comment the thumbs up 0 likes

Same could be said about my country, Nigeria.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 26 January, 2016, 11:06Be the first to give this comment the thumbs up 0 likes

This is missing the point of how disruptive innovation really works. UBER hasn't become what it is today by waiting to launch until it could foster a warm and cozy feeling between local NYC government and the incumbent NYC taxi medallion system. The ability to leverage regulatory ambiguity is the hallmark of many successful startups. According to legend, Uber's cofounder Travis Kalanick once slipped out from the backdoor of his office when he heard that a couple of San Francisco cops were headed his way to apprehend him for breaking the SF taxi code. This ability comes from fierce ambition and tremendous risk-taking ability. If the Dutch fintech startup ecosystem has that, other things are secondary. If it does not, no amount of regulatory support will help.