The European financial services landscape is far from being a united one, and a lot remains to be done to encourage cross-border cooperation, according to a panel at the Digital Finance Summit in Brussels this week.
For Cristian Sarafidis, chief business development officer for worldwide financial at Microsoft, the financial sector is one with completely different demands to other industries.
“The sector is different because it is all very interconnected,” he says. “Banks do business with themselves, each other, consumers, corporates and small companies. On top of that there’s a market layer and intermediaries that add complexity when it comes to operating in different geographies with different regulatory requirements.”
Benedikt Voller, head of Europe at Raisin, adds that one of the first offers they had was from a Bulgarian bank looking to offer deposits to German customers.
“We have 85 banks from 24 markets being present on our platform and it means we have to talk to different regulators about anti-money laundering (AML) needs, tech treatments, bilateral contracts and more.
“It shows that we’re very far from having a unified European market. Sometimes it’s also very difficult to tell customers about those difficulties and challenges.”
Voller says that he can see a movement towards harmonisation in the bloc that could help customers be treated equally cross-border, but there remains a lot to do.
Joel Rosenbaum, global head of strategy and corporate development at Santander Digital, believes that Europe isn’t that different from the United States in having multiple different segmented jurisdictions.
“There are areas to compete and common markets but there are differences ingrained in different markets.”
Speaking for the regulators was Elisabeth Noble, senior policy advisor at the European Banking Authority. She says that there remains “quite a high level of fragmentation”, especially on the disclosure of risks to consumers.
“They’re all regulated at the national level and that does pose challenges to an institution or platform provider looking to offer their services cross-border.
“It’s exceptional that we have this huge market for 500 million people but the percentage of people engaging in services cross border is fractional. I think on the supply side there is a lot more that can be done to help the provision of these services.”