Source: eFinancial carreers
The Finance Innovation cluster organized Monday morning in Paris a conference on France can it become a European hub of Fintech? with the presence of bankers, lawyers, regulators and fintechs corporate bosses. The meeting, though scheduled long before knowing the outcome of the British referendum was therefore could not be more topical, even if the speakers were careful not to spill on the subject of Brexit, preferring to focus on the the ambition of France to become a European hub for FinTech.
Finally, Alexander Linden, senior director Asset Finance & Securitisation at BNP Paribas (London), Cyril Zimmermann, founder of the French group Hi Media and Thibaut Verbiest, Attorney Partner at De Gaulle Fleurance & Associés, encouraged the government to capitalize on the strengths of France in order to attract investors, startup and international companies.
The FinTech UK ahead, really?
For Brexit or not, the London today has quite a head start. In 2014, $ 623 million will have been raised to finance Fintech young shoots, against 21 million in France. This high standard is often attributed to the administrative burden that weighs on the Hexagon entrepreneurs. Now the sector is carrying. Internationally, investment in Fintech quadrupled between 2008 and 2015. And it is in Europe that growth is strongest.
Moreover, the British advance is relative. « Looking closely, Paris and London have a similar number of fintechs » says Joelle Durieux, CEO of Pôle Finance Innovation has already certified 350 fintechs companies in France. « Financial regulators have recently announced the creation of a one stop shop for entrepreneurs in the sector, while observed a tightening from the UK regulator, which becomes more cautious following the bankruptcy of some Fintechs, » she recalls .
For its part, Thibault Verbiest noted the existence of a bubble around fintechs UK. « The payment operator Powa, valued London unicorn 3 billion pounds, recently the subject of a judicial recovery …. lack of clients! « He recalls. It is true that investors, policyholders easily out of their holdings, do not always care about the strength of business models.
real assets …
Participants stressed the globally recognized capabilities in the field of research and training, the robustness of the banking system (4 banks in the top 10 European), etc. « The Hexagon can count on a wide community of engineers, developers and mathematicians, recognized around the world. The pool is here! « Notes Joëlle Durieux.
Cyril Zimmermann, founder of the French group Hi Media that developed in France and abroad, agrees that France is a « fertile ground in terms of training and skills. For proof, the French bankers are exported very well. » Moreover, he recalls that a number of former employees of leading cryptography Gemalto (formerly Gemplus) have spread and became patrons of fintechs companies. Consequence: France now has engineers and lawyers pointed in Blockchain.
The controller in the game
To all this comes to Bio Add support for public pouvois and regulators who understood the importance of making Paris a hub for fintechs. In early June, the Financial Markets Authority (AMF) has created a division Fintech, Innovation and Competitiveness (FIC) with the objective to analyze current innovations in the investment services sector, and identify issues in terms of competitiveness and regulation.
The FIC division will drive further to the AMF announced the joint approach with the Prudential Control Authority and Resolution (ACPR) to coordinate the action of the two authorities for reception and regulation of innovative projects. « We are doing upstream work to improve the quality of applications for approval of promoters, » says Nathalie Beaudemoulin.
Néamoins She recalls that the banking sector is highly regulated in France, so that access to credit activity in France is more difficult than UK where activity is disintermediated. Which, incidentally, did not prevent France from being the first European country to set up a regulatory framework for crowdfunding.
Learn from the experience of the UK
« The French FinTech entrepreneurs need support that would make them more inclined to risk, » says Alexander Linden who, at BNP Paribas in London, regularly works with platforms for SME loans. And to quote the SandBox project (literally ‘sandbox’) set up by the UK regulator FCA (Financial Conduct Authority) and will enable banks to live test new products for several months in an even nonexistent simplified regulatory framework .
Nathalie Beaudemoulin shows look very closely technically this project while recalling the need to « know reason to keep. » SandBok the project is indeed not free of questions: who will manage the consumer in case of abandonment? And especially how to move from an unregulated framework for an ultra-regulated framework? As is clear, beyond this experiment, the challenge is to find the right balance between regulation and innovation …
Weaknesses to overcome
Finally, stakeholders have pointed to some current weaknesses that must be overcome for a chance to become a real European hub of the FinTech. Thus, some noted a lack of private equity structures specialized in fintechs and incubators that could rival the famous Level 39 Canary Wharf which includes 150 fintechs.
« We should not have a defeatist attitude. A new deal is still possible, « says Thibault Verbiest. Especially in London (as well as in Paris), almost half of fintechs are positioned on innovative payments before the crowdlending and the emerging market of robo-advisors. However, the possible end of the European passport to serve all European countries closely concerns the British fintechs specialized in innovative means of payment (mobile payment, wallets …) that could be brought to relocate, at least partially, activities .