Adoption so far is low, but opportunities for startups abound.
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Opinions expressed by Entrepreneurs contributed.
A number of technologies and new regulations are ready to destroy the incumbent financial system. So much so that the emerging field of financial technology has earned the portmanteau "fintech". The term "financial institution" no longer evokes visions of a secular and technophobe business, but of an ever-wider range of start-ups and partnerships that aim to whirl the banking sector and investments on a rapidly evolving playing field.
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The Fintech Adoption 2017 index of EY provides some incredibly valuable information on the state of fintech. A trend of particular interest, given the subject of this article, is the adoption rate of fintech worldwide – not surprisingly, China and India rank higher, with 69% and 52% respectively (figures that no doubt reflect the huge amount of mobile payments in these countries). The United Kingdom, Germany and Spain exceed the average adoption rate of 33%, but the rest of the European countries fall below
. This should not however be perceived as a lack of interest. I would say that the fintech scene in Europe is, indeed, booming. The recent move by the EU to promote growth by removing administrative friction in cross-border collaboration is an incredibly bullish indicator. To this is added a number of fintech hubs already existing on the continent (eg Malta, Estonia or the Swiss "Crypto valley".
Related: The "crypto valley" of Switzerland presents real opportunities for the blockchain Entrepreneurs  An often neglected but very important piece of legislation is the PSD2 (or payment services directive 2) of the European Union, which obliges banks to open their own APIs so that third-party services can be built on their fine shoulders.This is a huge development: financial institutions have traditionally remained very cautious from the technological point of view, but the new directive means that other companies can experiment without sacrificing the security offered by long-standing banks. to note is that now the newcomers do not need to compete, but they can rather pick up where the incumbent institutions have stopped.
egno, in particular, is an ideal candidate for directing the fintech movement in Europe – at 42%, it is positioned directly after China and India for the adoption rate and estimates place its fintech industry at tens of billions of annual revenue . At the heart of this movement is a combination of regulatory, economic and social factors – the population is highly technological and there are excellent market opportunities for new arrivals in both London and Edinburgh.
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Few barriers appear to surface. An older report mentions, however, that space innovators would appreciate further government support in promoting an environment of acceptance, adoption, information sharing and increased access to talent. Currently, apparently, political sentiment has not been sufficient in the eyes of industry leaders.
All in all, Europe has the unbridled potential of becoming one of the fintech leaders. Given the recent application of the GDPR ( or of the General Data Protection Regulation ) finance and technology companies will have to start exploring different and more innovative ways to protect their customers' data – and emerging technologies are exactly the way forward.
The GDPR is the EU directive intended to give users a sense of autonomy in relation to personal data. Following multiple catastrophic data breaches, GDPR provides clear standards for storing consumer information and acceptable use cases. To better adapt the industry to these increasingly complex regulations, fintech leaders will have to exploit the potential of monetary and data storage applications emerging in blockchain and elsewhere.