17 Mar The role of compliance and regulation in the fintech space
There are many moving parts in the fintech space, and the most often lagging behind is regulation. But the importance of legislation, and thus compliance, need not to be underestimated. Well known fintech innovations, like crowdfunding and bitcoin, are known to struggle with the regulators worldwide. We think it is of utmost importance that eventually efficient and correctly sized legislation will be effected by the government, that creates a level playing field for al financial services.
Holland FinTech therefore argued the time was ripe to organise an event where many relevant experts in the fintech space sit down together to discuss the current status and future of compliance and regulation. So last Friday, around 90 visitors joined our meetup at KPMG’s spacious HQ in Amstelveen. At 16:00 Don Ginsel, founder of Holland FinTech, kicked off with a warm welcome to all and a brief overview of the program. The first speaker was Robert van Altena from KPMG, who lectured to the audience about the ‘regulatory life cycle’. Not many companies, especially start-ups, are familiar with this cycle, let alone the importance of upcoming regulations. For example, the new payment services directive update is projected to have a big impact on both traditional businesses and startups. Robert’s advice is to detect any legal changes in time, assess its probable impact, and then figure out what the opportunities and/or financial burden to the business could be. The impact of regulation also offers fintech start-ups business opportunities, for example in the area of client identification.
Then Arno Voerman from Van Doorne elaborated on customer due diligence. The traditional identity verification for ’client onboarding’ aren’t really effective nor practical, which provides a great opportunity for fintech start-ups to offer better solutions.The same goes for strong customer authentication. EBA Guidelines requires this for internet payments as per 1 August 2015. Arno also addressed the supervisory themes of DNB for 2015. Don Ginsel added that despite the high growth of venture capital investments in fintech start-ups, the ones with a focus on regulation and compliance are often overlooked. This stands at odds with the fact that 90% of all IT spending of the big banks are to be compliant with the law. Don showed an overview of around 20 startups active in this specific space in the Netherlands. Lastly, he showed the Gartner Hype Cycle for governance, risk and compliance; food for thought at which stage we are right now in this cycle.
The third speaker was Roman Zagrosek from Stuttgart based Compliance Solutions. They offer a business process compliance solution, split up into modules like risk management, data protection and anti-money laundering. Then KYCnet gave a speech about their unique know-your-customer as a service solution. With big corporates like ABN AMRO, ING, Accenture already on board, this start-up definitely has a validated product..
1U Benelux, agent of the US based Hoyos Labs, presented their disruption for the world of passwords. According to co-founder Rob Goijen, passwords should soon be a thing of the past. He demonstrated a great solution using biometrics. You can use your smartphone to access your personal data (using an iris scan or your fingerprint for example). In the USA, Hoyos managed to get plenty of exposure by appearing on CNN and Fox News.
Last on stage was Niels Groothuis, tax advisor at KPMG Meijburg. He spoke about tax incentives like WBSO and the innovation box, and stressed that although tax compliance may be regarded by many as a somewhat boring subject, every company has a lot to win by looking at tax laws in depth.
The meeting ended as always with a nice borrel (drinks) and opportunity for everybody to connect with the speakers and each other.
