Although the European Union is a single market financially speaking, there are still many differences on the national level when it comes to regulations for banks and fintech companies. As a result, Europe still has a long way to go before it can expect further fintech success. Joost Walgemoed, CEO of Blanco, is calling for change. If fintech companies and banks make their voices heard and work more together, and if the EU starts living up to its responsibilities, then Europe could become much more competitive in the field of fintech.
Gold-plating and different legal interpretations
In financial terms, the European market is a single block: It is possible and increasingly easy to exchange financial resources across national boundaries within the EU. More and more regulations are being created on the EU level as well. Yet on the member-state level, there are still many differences in the way banks and fintech companies are regulated. There are various reasons for this, and each of those problems must be addressed.
First of all, some variation exists simply because national laws and regulations have not yet been adjusted. In such cases, European legislation is out of step with reality, which results in differences in legislation among the various member states. For example, the German tax code still distinguishes between citizens depending on which religion they adhere to. Legislation like this is out of touch with modern society and shows that we must still take many steps before we reach the uniform set of laws that a shared market requires.
Another problem is so-called gold-plating; a legislative practice in which European member states layer new national-level laws or conditions on top of existing European laws. This is counter-productive to the goal of creating a single European market in which economies of scale can arise. By enacting such legislation, national governments are making it harder to create a shared market for financial solutions.