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The founder and CEO of Starling, a digital bank, has expressed her views stating that EU laws have helped to shape the U.K.’s FinTech sector, but she fears that the result of Brexit could see the sector stalling.
Anne Boden, who set up Starling in 2014, praised the EU by saying that it had come up with ‘very good payment and banking legislation,’ according to a report to the Financial Times.
I know the traditional banks don’t always like it, but if you look at it from a competition and innovation point of view, and especially for the development of fintech, then European legislation has been both important and good.
Boden mentions the payment service directive, a 2007 law that means banks have to open up the national payment systems to new competitors. Boden’s online bank, which is attempting to take on the U.K. retail finance sector, joined the U.K.’s faster payments system last month.
She does, however, fear that the result of Brexit will mean that FinTech startups in the U.K. could miss out on laws such as the Payment Service Directive Two (PSD2). This is the second payment services directive that has been created to improve competition be getting banks to permit third parties such as financial technology firms, to access customers data, making it easier for them to showcase their competing services.
Boden sees this as the perfect opportunity for her online bank which is selling a technology that is customer-friendly and smart.
Yet, European FinTech firms believe that banks are lobbying against EU legislation that could see a power balance shift, forcing FinTech firms to remain behind as banks refuse to hand over customer data.
We need to make sure we don’t miss out on the next wave of competition legislation.
Furthermore, as Boden’s startup accounts for 80 employees who are from overseas countries, many of the from the EU, she faces further challenges of hiring from mainland Europe after Brexit.
London’s FinTech Faces Increased Competition
As the current financial technology hub in the world, London is constantly facing competition from other countries who are trying to oust the city from the top spot.
With the likes of France, Singapore, China, Germany and Hong Kong, there is huge potential for any of these locations to take over the top spot.
And yet, despite these challenges, Boden is confident that the U.K. will remain an important FinTech hub, regardless of the outcome.
Featured image from Shutterstock.