Fintechs: New titans vs. incumbents?

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On the 24th of October, as head of legal at Auka, I had the pleasure to join the Fintechs: new titans vs. incumbents? This was a panel discussion at a Concurrences Review in Brussels. The event was called “Towards more competition in high-tech markets – European perspectives”. It was held in partnership with Copenhagen Economics and Shearman & Sterling.

Towards more competition in high-tech markets? 

We discussed whether banks and fintechs are on a level playing field. We also spoke about the amount of regulation and supervision required when it comes to fintech vs. banks. Finally, we covered issues of infrastructure access and what role blockchain will play in the future.

I participated, alongside other legal practitioners, members of the Banking Federation, academics and European Commission representatives.

The other participants included:

Noémie PAPP | Head of Digital and Retail, European Banking Federation, Brussels

Elvira ALIENDE RODRIGUEZ  | Partner, Shearman & Sterling, Brussels

Jonas HEDMAN | Associate Professor, Copenhagen Business School, Copenhagen

Witte WIJSMULLER  | Policy Officer in the Cloud & Software Unit of DG CNECT / Member of the Fintech Taskforce of the European Commission

Photography by © Emilie Gomez

In my statement, I linked the level of compliance maintained by fintechs to the type of services they provide. If a company only provides a complementary service, there is little added value. The fintech might not be required to comply with any particular regulation. However, in such cases, services are easily replaceable by the banks themselves. So, fintechs focusing on these areas aren’t providing much competition. If, on the other hand, a fintech provides a more advanced solution (as is the case at Auka) it has far more compliance responsibilities. 

Fintech disruptors

As a pioneer in the payments industry and provider of a complete mobile payment solution, Auka was the first fintech in Europe to obtain a payment institution license under PSD1. We are fully PSD2 and PCI compliant and under the supervision of the Financial Supervisory Authority. Auka was the first FSA-regulated company in the world to operate 100% in the public cloud (Google Cloud). We have a customised agreement with Google and sit on the Google cloud advisory board.

Read more about Auka’s newest product, Settle – mobile payments for Europe – here.

While discussing infrastructure access from the fintech’s perspective, I made the point that it didn’t use to be a prominent issue, but it could become one. It’s therefore important for lawmakers to have an open discussion about it. In Norway, 65% of the population use mobile payments. PSD2 will open up banks’ APIs and make it easier for third-parties such as fintechs. This is because they no longer need the banks to agree in order to open their infrastructure. It opens up opportunities for new business models.

I’d like to thank Concurrences Review, Shearman & Sterling and Copenhagen Economics for inviting me to join their panel to discuss this fascinating topic.

If you’d like to know more about Auka or Settle, get in touch.