Conrad Ford, Chief Executive of Funding Options writes why the UK is increasingly the blueprint for both theory and implementation of new EU-wide standards.
By Conrad Ford, Chief Executive of Funding Options
I recently had the pleasure of taking part in a lively breakfast meeting hosted by Portland Communications and reported by Anthony Hilton, City Editor of the Evening Standard, with some of the UK’s leading FinTech firms like TransferWise and Funding Circle in attendance. One of the many interesting topics we discussed was the opportunity in Europe for our rapidly growing sector, and what the future of FinTech looks like not just in the UK but across the European Union (EU).
The EU is currently enacting lots of changes to harmonise financial regulation across Europe. A subject close to my heart is that the UK, with its forward-thinking regulatory environment, is increasingly the blueprint for both theory and implementation of these new EU-wide standards. Here are three current examples:
First, parts of the European Commission’s recent Action Plan on Building a Capital Markets Union (CMU) read like an EU-wide manifesto for signposting non-bank SME finance, as is currently being rolled out in HM Treasury’s Bank Referral Scheme (in which banks that decline SMEs for finance will be required to refer them on to alternative finance providers).
Second, the European Investment Bank (EIB) is now expected to invest in Funding Circle peer-to-peer loans, which suggests the intention to pilot across Europe what the British Business Bank, the UK’s new national development bank, has been doing to promote alternative SME finance.
Finally, and perhaps most importantly, the new revised Payment Services Directive (PSD2) will open up access to bank account transactions and level the playing field between traditional banks and FinTech providers. The UK is stealing a march in setting standards with its own government-backed Open Banking Working Group (OBWG); these bank application programming interfaces (APIs) will offer the FinTech sector huge new opportunities, such as automated credit decisions and new payment propositions, increasing competitiveness and giving consumers and SME businesses better value.
Overall, I hope that Brussels chooses to benefit from the UK’s live market learnings by adopting and adapting what has already been proven here. It would be dysfunctional for the UK to retrospectively have to adjust a tested model to a theory-based EU framework; and it would be a real shame for consumers in the rest of the EU not to benefit from the UK’s pioneering FinTech sector.
Funding Options was recently described by the Telegraph as “the matchmaking website for small businesses and lenders”. With the free Funding Options service, you can quickly search dozens of alternative business finance providers.