Financial Firms Covid-19

Financial firms adapt to a new digital environment

According to a report by Broadridge Financial Solutions, financial firms faced a need for technology transformation even before the pandemic. A digital transformation would as regulate cost pressures, increase competition and shift customer expectations acted as catalysts for change. Now, in the wake of a global shutdown, record unemployment and social restrictions, they are revising their plans to adapt to a new digital-first environment. Almost all are turning to next-gen technologies to address the complexity ushered in by the global crisis. This study takes the pulse of the market today: where financial firms are, where they are going and how they will adapt to a new digital environment to get there.

Many executives see short-term cost reductions as inevitable. However, most expect their businesses to recover soon. As they adjust to new priorities and opportunities, they are accelerating their plans to implement next-gen technologies and the underlying data and analytics that power them.

Firms are optimistic about the road ahead
For some firms, “recovery” may mark a relative return to pre-COVID-19 conditions. However, for many, financial firms are accelerating to adapt to a new digital environment. Adjusting to remote working conditions is the obvious change, but there’s a broader focus on technology transformation. Organizations that seize upon next-gen technology opportunities may widen their competitive advantage.

Find Broadridge’s full survey here.

About the study:
This Pulse Survey, completed June 1, 2020, is based on research commissioned by Broadridge. It surveyed the views of 500 global C-suite executives and direct reports from buy side and sell side financial institutions.

Broadridge began as the brokerage services division of ADP in 1962. Since becoming independent in 2007, they have grown into a global Fintech company with over $4.5 billion in revenues and are recognised as an invaluable partner for the world’s leading companies and financial institutions.


Picture by PixxlTeufel / Pixabay
Text by Broadridge

More topics:

SWIFT announces a new strategy for instant, frictionless payments and securities processing
Eurex to launch next generation of ESG derivatives

 

SWIFT announces a new strategy for instant, frictionless payments and securities processing

Over the next two years and beyond, SWIFT will fundamentally transform payments and securities processing, retooling cross-border infrastructure as part of a new strategy approved by its Board to enable the world’s financial institutions to deliver instant and frictionless end-to-end transactions.

Read more

Brussels applauds crypto-regulation

EU sets a foundation for financial market digitalisation

The EU Commission wants to support financial market digitalisation with a comprehensive regulatory package. Yesterday, authorities in Brussels presented proposals for the handling of crypto-currencies and increased cyber-security in the financial sector. They also introduced a new payment services strategy. So-called Stablecoins like Facebook’s Libra are to be subjected to strict rules.

“We should take a proactive approach to digital transformation,” stressed EU Commission Vice-President Valdis Dombrovskis.

The digital single market for financial services is also of crucial importance for Europe’s economic recovery.

The financial sector responded positively to the Commission’s proposals. Andreas Krautscheid, Chief Executive of the Association of German Banks (BdB), spoke of “unmistakable, clear signals for Libra and co.” Regulation of digital currency is long overdue. “It is about Europe’s digital currency sovereignty.” Federal Minister of Finance Olaf Scholz (SPD) announced that the digitalisation package and new action plan for the Capital Market Union, also presented yesterday, will be on the agenda at the next meeting of EU finance ministers in early October.

“With these proposals, we can promote innovation in the financial sector so that Europe sets standards worldwide.”

According to Philipp Sandner, Head of the Blockchain Centre at Frankfurt School of Finance & Management, the EU’s crypto proposals successfully set a broad and comprehensive set of standards. In an interview with Börsen-Zeitung, Sandner said that the proposal would cover about 95% of existing crypto-assets currently by market capitalisation and 85% by amount.

To deepen the Capital Market Union, the EU Commission announced an action plan with 16 measures with implementation beginning in 2021. “We have 27 national capital markets that are not fully developed and integrated,” Dombrovskis complained in Brussels. The measures include a review of current regulatory requirements, more robust investment protection, harmonisation of insolvency rules and the creation of a single access point for company data.

 

Source: Börsen-Zeitung, 25 September 2020, Andreas Heitker, © All rights reserved.

Image: Gerd Altmann/Pixabay

Finance & Banking Summit and Big Data & AI World Frankfurt

Finance & Banking Summit

The Finance & Banking Summit – taking place on 27 October 2020 – is an interactive 1-day digital event, which consists of inspirational keynotes, case-study based presentations and fiery panel discussions. This event will create an unparalleled learning opportunity for data teams, offering providers an opportunity to connect and engage with the UK’s most senior banking & finance decision makers, as well as with our APAC & EMEA communities of data experts.

It’s clear that things are now shifting and there’s a desire to get digital transformation projects back on track.  With that comes the need to connect with new and existing providers, as well as accessing ideas and information needed to design, build and manage technology architecture. The Finance & Banking Summit delivers an inspirational conference programme from sector experts, offers sponsors, exhibitors & visitors one unmissable day of free education, networking, lead generation and industry insight.

The virtual summit is free for all working in digital, IT, AI & Machine Learning within or on the Finance & Banking Industry.

Finance & Banking Summit will be held virtually on October 27th 2020: 10:00 – 17:00.

Register here


Big Data & AI World Frankfurt

From data management to data integration, from machine learning and AI to analytics, Big Data & AI World in association with BARC is a world-class event that delivers more features, information, products and services than ever before – whilst focusing on what really matters for you and your business.

You will enjoy free education from various expert speakers covering all the key big data and AI topics. Furthermore, there will be thousands of your peers, offering you a valuable time of networking and idea-sharing. You’ll also be able to meet face-to-face virtually with market-leading data solution providers, offering you the services and solutions you’re looking for.

Big Data & AI World Frankfurt will be held virtually on the platform Swapcard on November 11th and 12th 2020.

11. November, 2020: 09:00 – 17:00
12.  November 2020: 09:00 – 17:00

Register here

 

Image: Gerd Altmann/Pixabay

Women network differently than men

The UBS banker on the women’s network FinTech Ladies and diversity, equal opportunities and structural change in the financial sector

The FinTech Ladies is a network for women in the financial industry, which was launched in 2016 by Christine Kiefer, founder of Ride Capital. In an interview, Alexandra Weck, as an ambassador responsible for the group’s events in Frankfurt and Munich, explains the orientation of the FinTech Ladies and the challenges for women in the industry.

Ms Weck, the FinTech Ladies were founded in 2016. How many members does the network have now?

We are not a classic network with contributions or a platform where people log in regularly. Therefore, it is difficult to quantify the number precisely. But, our newsletter has over 2,000 subscribers, and these are participants in our events.

What are these events about?

We hold events in various cities, such as Munich and Frankfurt, for which I am responsible, but also Hamburg and Berlin. Now we are also in Austria, Sweden and Belgium. There are always ambassadors on-site who promote these events, and they do so voluntarily. The network grows purely organically, and none of us earns a living from it.

How are the meetings run?

The unique thing is that we keep our events very small, with about 20 to 30 ladies per evening. One company always sponsors the evening and usually provides a speaker. At Mastercard, for example, the evening covered diversity within the company. Afterwards, each participant introduces herself and tells us how she relates to the FinTech industry and what she is looking for or has to offer. These introductions give you a specific impression of who is participating and enable targeted discussions. This is much more useful than going to an event with hundreds of women and where it is pure coincidence with whom you speak. It is also true that women network differently from my point of view.

In what way?

Women begin to network much later than men. Men have beers after sports, for example. Socio-culturally that is established much earlier, and then more intensively and broadly. Often, women only start networking when they realise that they are missing something like that. And then it is often the case that women want to or have to be much more efficient and goal-oriented because of their family situation, for instance. A few times, I have experienced that women go to an event and expect immediate output. But this is not how it works. And if they have the impression that it didn’t help at all, they leave it altogether. But time is important in networking, as well as focus and thinking long-term.

Networking events are a core element of FinTech Ladies. How do you deal with this now?

Indeed, this has been a challenge. In March, we still had many requests from companies to hold events at their offices. Due to Corona, this has come to a standstill, not only because of the contact restrictions. As organisers, we all have our professions and were also much more involved in our own job situation. We didn’t organise anything during the summer holidays anyway. We are currently starting physical events in the cities where it’s possible again, and also purely digital events. Recently, for example, we held a FinTech Ladies event at Raisin in Berlin.

What is the focus contentwise?

The focus is, of course, on finance and tech. But the content also depends on which company is hosting the event. We had events at law firms in Munich and Frankfurt, which dealt with the tokenisation of assets from a legal perspective. Or in Munich, something about cultural change, with the question of what happens when a Chinese investor takes over a small private bank.

What differences do you see between women and men when it comes to a job or career?

When it comes to a job posting, for example, it is often the case that men simply have more confidence in themselves, even if they don’t meet all the requirements. Women, on the other hand, often say, “Oh, I don’t meet 100% of the requirements. I won’t even try.” Some women lack this fighting spirit, the desire to compete, and many are also too hesitant and afraid of failure.

How can this be changed?

Personally, I am an absolute advocate of sports. Through sporting competition you can practise going into confrontations, taking risks, even in situations where you can lose. It requires discipline, focus and courage, just like at work. Incidentally, for me, polo is an excellent fit with the topic of diversity. It is one of the few sports where men and women of all nationalities and ages play together on the same field and in the same team.

What unique challenges do women face in the financial sector?

Simply being asked these questions is always a challenge. Professionally, we can all do exactly the same thing. There are many women in the financial sector, but there are still too few women in exemplary positions.

Did the Covid era create specific problems for women, and if so, which ones?

What I have often observed from my environment is that the lack of childcare is undoubtedly a problem. If this issue is better resolved for families, the question of who stays at home for how long will no longer arise so often. It is often the person who earns less. And that is usually the woman. Politicians could also regulate this in such a way that this is not always or often the case. But the salary issue is an entirely different matter. The salary gap that often exists also reinforces the traditional distribution of roles.

How can the gap be closed?

One good initiative, and I know some women who have taken advantage of this, was that for some time now, it has been possible to request information from the company about the salaries of colleagues in similar positions. Basically, I am not a fan of equal pay for all, but rather a fan of performance-related pay. But it would be good if the controlling department in a company also made sure that there is not too large a gap on a gender basis alone.

Through your role at UBS, you have insight into both worlds: Are there differences between established financial service providers and FinTechs in their approach to diversity and equal opportunities?

Basically no, start-ups and large companies alike have recognised the importance of diversity and that in the long run, this leads to a better corporate culture, more satisfied customers and growth in profits.

How is it that the proportion of female managers in start-ups is only 20% globally and only 4% in Germany?

I researched this once, and it seems that the founders of FinTechs are often high-ranking managers of banks or management consultancies. And the higher the proportion of men in the management team there, the more this is reflected in the FinTech scene. In this respect, it is sad, but not surprising at the moment. There are always good examples of female managers in the financial sector: FinTech founders like Christine Kiefer from Ride Capital or Lena Justen, who has very successfully helped to build up Fino. Or in the classic financial sector, for example, Simona Stoytchkova, the German head of IG Europe.

According to a study from BCG, all-female start-ups have a 40% lower chance of obtaining growth capital in the second round. In the third round, women are even 90% less likely to gain access to growth capital. Have women in your network described similar experiences with funding?

I hear from my network that it is more difficult. One can only speculate the exact reason for this, but the fact that fewer women are involved in VC or investment firms probably plays a role.

Could a women’s quota help?

Quotas are a difficult issue. I have often asked myself how I would feel if I was hired based on a quota. Personally, I am not a fan of a women’s quota, because I also think the discussion, in general, is far too short. Diversity is also about nationalities and many other issues, not just about women or men. A women’s quota can certainly help to create a basis. Still, it is questionable whether this is the right way forward in the long term and whether everything else has already been tried sufficiently. Putting certain topics in school curriculum will undoubtedly help more in the long term than introducing a women’s quota now.

Do you see other regulatory approaches to changing structures?

It could be helpful if companies had to publish such topics in their financial statements, if this became a measurable key performance indicator, perhaps in a kind of traffic light system. I, for example, would not prefer to work in companies where I have the impression that they do not really care about these topics. It would also be conceivable that this could be used in the context of a key performance indicator to classify a company even in terms of its value, up to and including rating relevance. As a rule, these topics are only dealt with when money is at stake.

And beyond hard factors such as salary, where do you see inequality in treatment between women and men?

What I keep hearing from the FinTech Ladies network is that women have to prove their competence more than men by means of KPIs. And that the behaviour of women and men is assessed differently. In conflicts, a man is said to be assertive. And with a woman, who actually behaves in the same way, this is seen much more negatively with completely different concepts. And then there are also prejudices and role conceptions with which a woman is constantly confronted. A woman from my network once asked her boss for a pay raise, and his answer was “Why? Your husband works for a premium car manufacturer; it’s just your personal luxury to work here.”

It must be hard to resist something like that directly.

But you can practise it. Once you’ve jumped off the three-metre tower, you jump again. But the first time is always the hardest.


About the person

Alexandra Weck (32) has worked for more than two years in the Business Development, Financial Intermediaries division of UBS Europe SE in Frankfurt. Before that, she worked for FinTechcube, Baader Bank and Unicredit Bank. Parallel to her training as a banker, she studied Economics and Management Studies (B.A.) at the Duale Hochschule Baden-Wuerttemberg in Mannheim. In addition to her volunteer work since the end of 2017 as an Ambassador of the FinTech Ladies (www.FinTechladies.com), responsible for Frankfurt and Munich, Weck is a member of the International Token Standardization Association (ITSA) and served on the jury of the FinTech Germany Award since 2019 (see adjacent article). According to her statements, the passionate sportswoman builds websites in her spare time.

 

Source: Börsen-Zeitung, 15. September 2020, Franz Công Bùi, © Alle Rechte vorbehalten.

Image: Priscilla Du Preez/Unsplash

Outstanding Start-ups – FinTechGermany Awards presented

Top performance in difficult times: Eight financial start-ups received the FinTechGermany Awards in Frankfurt on September 17, 2020 – the most important FinTech award in the German-speaking countries for five years. At the awards ceremony in the Tatcraft New Hardware Studios, over 200 FinTech and InsurTech enthusiasts, bankers and investors celebrated the winners. The livestream was followed by numerous interested people.

The award was presented in eight categories:

  • Category
  • Seed Stage
  • Early Stage
  • Late Stage
  • Growth Stage
  • Foreign New Entrant to Germany
  • Insurtech
  • Artificial Intelligence
  • Blockchain
  • 1. Place
  • Tangany
  • Myos
  • Penta
  • Raisin
  • Qonto
  • Getsafe
  • Hawk AI
  • Cashlink

In total, more than 220 startups and scaleups from Germany and around the world had applied or were nominated by the jury at the beginning of the year. The jury then compiled a shortlist of 43 start-ups. The prestigious FintechGermany Award has been presented since 2016 – this time, due to the corona pandemic and the resulting hygiene and distance regulations, the award ceremony was held for the first time as a hybrid event and not, as usual, in the Tech Quarter at Messe Frankfurt.

Dr. Jens Zinke, Managing Director of WM Gruppe/Börsen-Zeitung, which has been accompanying the award since 2016 as media partner and co-organizer, says: “This was the fifth time that the FinTechGermany Awards were presented and once again it showed the high performance density among young and innovative companies in the financial sector. A big praise to all participants, all applications were of high quality, which is really impressive in an international comparison”.

Michael Mellinghoff, Managing Director of TechFluence UK, co-organizer and co-head of the jury: “For the top-class, 19-member jury it was a very special challenge to track down the top FinTechs from all over Germany among so many really great applications this year. We are particularly pleased that this year, with Raisin, a company has managed to take home our award for the second time”.

Dr. Lutz Raettig, President of the Financial Center Initiative Frankfurt Main Finance: “This year’s edition of the FinTechGermany Award has once again proven that young financial companies can establish themselves alongside the top performers of the financial industry and that the source of ideas for new business models, products and services does not dry up.”

The complete list of the winners:

  • Category
  • Seed Stage
  • Early Stage
  • Late Stage
  • Growth Stage
  • Foreign
  • Insurtech
  • Artificial Intelligence
  • Blockchain
  • 1. Place
  • Tangany
  • Myos
  • Penta
  • Raisin
  • Qonto
  • Getsafe
  • Hawk AI
  • Cashlink
  • 2. Place
  • Spherity
  • Trade Republic
  • Fraugster
  • N26
  • SumUp
  • -*
  • -*
  • -*
  • 3. Place
  • Crypto Tax
  • Arabesque S-Ray
  • FinTecSystems
  • Mambu
  • Klarna
  • -*
  • -*
  • -*

*In the categories Insurtech, Artificial Intelligence and Blockchain no second and third places were awarded.

Impressions FintechGermany Award 2020

 

Photos: Kaleidomania / Axel Gaube

European Digital Week 2020: Fintech & Digital Banking Innovation Conference

The modern digital technologies are impacting traditional banking models and consumer expectations. More and more people are paying their bills using a smartphone instead of going to the nearest bank branch.

From 21 to 26 September 2020, one of the biggest events in the scope of digital technologies called “European Digital Week” will take place virtually.

The virtual event “Fintech & Digital Banking Innovation Conference” on 24 and 25 September 2020 is a part of European Digital Week 2020. Participants will have a chance to learn more about the latest innovations in this field. Lecturers of the conference are professionals with huge practise experience at the Conference. They will discuss important topics like future trends in the Fintech industry and new advances in processes and technology to improve overall banking experience.

Some of the topics that will be presented at the conference are:

    • Reinvent the Financial World
    • The Future of the Service Sector
    • GreenTech
    • Future of FinTech under Covid-19
    • Reinvent the Financial World
    • Innovative Digital Platforms in Cashless Society
    • SEA Insurance Market and Digital Transformation
    • Financial Crimes and Digital Forensics

Find out more about the speakers and schedule of the event here.

 

Eintracht Frankfurt and the TechQuartier are looking for students for the third edition of TechTalents!

With its two-month trainee curriculum, TechTalents seeks to empower the next generation of business leaders that have an eye on innovation, technology and entrepreneurship.

The TechTalents program is an education program founded by TechQuartier and Eintracht Frankfurt and offers bright, motivated students a unique environment to learn real-world skills beyond the everyday university experience. Read more

Back in Business – CRIFBÜRGEL’s new online portal ensures financial transparency in the crisis

Well-founded information about business partners or suppliers is even more important in times of crisis than in good economic times. With this in mind, CRIFBÜRGEL has developed Back in Business, an online portal that enables companies in Germany to let the market know that they are back in business. Companies that rebuild and strengthen their business relationships with customers, suppliers, dealers and importers are thus supported in showing financial transparency.

Companies benefit from the Back in Business initiative on several levels. First of all, the portal offers them a simple and free opportunity to provide their business partners and suppliers with an up-to-date picture of their economic performance and thus to document their activities with regard to future-oriented entrepreneurship.

As part of the Back in Business network, companies also benefit from exclusive access to webinars and services.

Further information can be found here.


Text by CRIFBÜRGEL

Europe lacks uniform rules – Marc Roberts in interview with Franz Công Bùi (Börsen-Zeitung)

The European Fintech Association (EFA) was founded in Brussels on 16 June. As a lobby group representing the interests of European FinTechs, it aims to advance topics on the digital financial agenda in the EU. Marc Roberts, Chairman of the EFA Board, discusses the association’s orientation, goals and potential in an interview.


The chairman of the newly founded European Fintech Association on the lobby group’s plans for financial start-ups.

  • Mr Roberts, the recently founded European Fintech Association is to become the mouthpiece of European FinTechs. Now eleven of the 21 founding members are from Germany, and the six-member board includes three German start-ups. Isn’t that an imbalance right from the start?

German FinTechs are still overrepresented in the association. We are in the process of balancing this out and acquiring FinTechs throughout Europe. Some will join in the near future. The initiative began in Germany, mainly as a result of a co-operation between Raisin, N26, Transferwise and Finleap. However, we try to create space within the board for a European perspective.

  • Among the founding members are four UK-FinTechs. In light of Brexit, what do they hope to gain from participating in an association that operates primarily in the European Union?

In the case of the British FinTechs, there are, of course, some restricted to the domestic market. Still, there are also many, including our members, who want to continue operating in the European market. What is essential is that they have an interest in European issues. The focus is not on Brexit issues, but on services within the EU. And for British FinTechs operating in Europe, the same questions continue to arise.

  • What requirements must members meet?

There are ultimately three prerequisites. First, it must be a European FinTech. This does not mean that it must have been established in Europe. It must have a genuine interest in focusing its activities in Europe and want to promote policy issues here. And it must operate across borders. In addition, it must have a tech background; in other words, it must provide technology-based services.

  • Your lobbying work for FinTechs will be based on the digital finance strategy of the EU Commission. Where is there a need for action?

A key point is that digital financial services bring real benefits for customers, businesses and also for regulators. For example, by making services particularly transparent, saving costs or reflecting product innovation. Current regulation is still very much tailored towards manual, rather analogue processes. This is particularly evident in the identification of customers. It does not take into account the advantages of digital services – when opening business processes, but also in many other regulations that protect the consumer. Ultimately, this is still based on the fact that a lot of paper is made available to the customer. In digital processes, this cannot be meaningfully depicted. Of course, consumer protection is essential, but one should still evaluate what is really useful in a digital process.

  • Could you illustrate this more clearly using the example of identification?

In this field, European regulation does provide uniform identification methods. It depends on whichever methods the respective Member State allows, which varies between each state. Basically, most Member States assume that a customer is identified face to face. This can be in a bank branch or in Germany, for example, through video identification or Postident procedures. These are not optimal processes for digital providers because the customer has to go out of the online offer and do something completely different. The normal course of business is interrupted and must then be restarted. Here, standardisation with a Europe-wide identification method would be desirable.

  • Where do you still see an acute need for action?

Some regulations make cross-border services considerably more complicated; for example, IBAN discrimination. In practice, this means, by way of example, that a French electricity bill can only be paid with difficulty from a German account. Accordingly, to operate on the French market, a German FinTech must have a branch in France just to obtain a French IBAN. In addition, there are special regulations in consumer protection, which mean that the interest rate has to be displayed differently for straightforward and transparent products such as overnight and fixed-term deposits. Each country has to develop its concept of how to do this – with taxes, without taxes and so on.

  • Fragmented regulations are often criticised when it comes to money laundering. What are your ideas here?

As already described, we have to deal on the one hand with varying regulatory specifications for digital identification. In addition, there is an area that is extremely important for co-operations, the so-called reliance on third parties. If a FinTech product is integrated into a bank, for example, the bank naturally does not want the customer to have to be identified again, since they are an existing customer. It should be possible to use the existing identification again for the integration of the new product. This is admittedly permitted within the European Union, including the provisions of the European Money Laundering Directive. But then there is so-called gold plating.

  • What do you mean?

Gold plating means that one has national regulations that have additional requirements for this reliance on third parties. For example, a time limit where the first identification must not be older than two years, or the requirement of a written contract or that the first step must have been a face-to-face identification. The new services under PSD2, i.e. payment initiation and account information services, are also subject to very different regulations as to whether these providers are obligated under money laundering law or not. The rules vary from one Member State to another, in particular the obligations that apply to these providers. In other words, you must always look at the regulations applicable to the service in question in the country in question.

  • How could this be solved?

The matter is primarily one of standardisation at the European level, which is a relatively lengthy process. It must first be decided, discussed with the Member States and ministries, and finally implemented. At the same time, however, certain areas could be regulated relatively quickly. One example would be to adapt the guidelines of the European Banking Authority (EBA) to allow certain areas to be regarded as low-risk and not subject to the corresponding obligations. There are also opportunities below the level of legislation to introduce significant simplifications for certain business models.

  • Some FinTechs would like to have a sandbox like in the UK. Is this also a direction for you?

Sandboxes are an exciting topic and an especially great opportunity for newer FinTechs or start-ups to get in touch with the regulator. What’s more, from our point of view, is the exchange on a European level between regulators on new business models. Often each country has to deal with each business model anew, and you always start from scratch. There is no cross-border exchange. We believe a kind of FinTech hub at the European level would be practical. This is also a point which we discuss with the European Commission.

  • Do you also see a need for change in the area of data protection?

Views on data protection, which is a concern for all our members, vary depending on the Member State. At the same time, GDPR provides uniform regulation at the European level, which is already a relatively far-reaching harmonisation. However, there are additional regulations at the national level, which are more or less strict. France, for example, is very strict compared with other countries. This is also the case in Germany. Especially in the financial sector, data protection plays a critical role. At the same time, however, we believe that the data protection issue should not be misused to discredit certain new developments.

  • What do you mean?

For example, in the area of opening up account interfaces within the framework of PSD2, we believe that this data protection issue has already been brought to the forefront in order to protect certain business models. As a consequence, regulation emerged that does not help anyone, especially not customers, and certainly not FinTechs.

  • It is often criticised that we do not have European Champions. How can Europe remain competitive? Where do you see disadvantages compared to other regions?

It is often said: If you cross the border by car, you have to obey the traffic regulations in the other country. The picture is a bit skewed when it comes to cross-border financial services. Because when you drive across the border, you don’t have to convert your car. But if, for example, you want to establish a platform across the border in another European country, then that is a project of six to eight months. You have to adapt the documentation and also the product, as well as design the conditions so that they comply with local law. There is no uniform regulation which would allow you to reach customers throughout Europe and use the full capacity of the market.

  • Are there any other obstacles?

It is much more difficult for companies to recruit talent in Europe because of the difficulties of employee participation in option schemes, especially from a tax perspective. This is a problem that needs to be tackled. It is bad for innovation in Europe if you cannot recruit the best talent, even though offering incentives could be a possibility. I understand the logic behind this, but a European stock option scheme is needed. The existing employee stock option schemes only ever work in one country according to the law of that country. If you have an employee who would rather live in Barcelona, then you have to set up a new programme. And of course, it is already challenging to set up an entirely new programme to acquire someone just because he wants to work elsewhere in Europe.

  • How do you assess the current situation for FinTechs in Germany and Europe affected by Corona?

The pandemic, of course, has a considerable influence on FinTechs. There is always a need for financing for rapidly growing companies, and we can see that the situation has not improved in the financing rounds as a result of this Covid-19 crisis. It hasn’t become impossible to get financing rounds underway, even large financing rounds, but the starting position is different from before the crisis. The same applies to recruiting.

  • In what way?

There is now a hiring freeze for the time being. It is complicated to train new employees with remote procedures. And of course, FinTechs also reduced staff. At the same time, it can be seen that most FinTechs are well-positioned. Firstly, through their business model, because digital services can basically still be offered. Secondly, the employees have had fewer problems with the necessary changes, because many of the services or working methods are very agile and Internet and cloud-driven. Overall, it must be said that FinTechs have proven at this stage that their product offerings are relevant.

 

Source: Börsen-Zeitung, July 7, 2020, Franz Công Bùi, © All rights reserved