The European Commission is looking to give fintech companies passporting rights in a move that could undermine London’s status as the European hub for the emerging tech sector.
The EU executive’s vice president Valdis Dombrovskis, who replaced the UK’s Jonathan Hill as the Commission’s financial services chief following Brexit, announced on Thursday the launch of a three-month consultation into supporting the growth of fintech.
Dombrovskis says that the Commission is looking to encourage fintech’s development in Europe while also protecting consumers.
“Consumers should have access to the best products available across the EU, not just within their own country,” he says.
Extending passporting to the sector would likely be a boost for the London’s fintech rivals on the Continent, such as Berlin, as the UK looks set to leave the EU’s single market in Brexit negotiations.
Dombrovskis cited UK-based wealth management service Nutmeg as well as “social trading network” eToro as examples of fintech companies that have benefited “millions of Europeans”. He also cited online payment companies Sofort and Transferwise and peer-to-peer and crowdfunding firms Twino and Funderbeam.
Speaking on the launch of the consultation, Věra Jourová, commissioner for justice, consumers and gender equality said: “While the right to move freely within the EU continues to be the most cherished right of Europeans, consumers in the EU are still experiencing too many barriers in their daily lives.
“Be it when opening a bank account, when buying car insurance or asking for credit: as soon as there is a cross-border dimension, things get complicated.”