The UK's fintech sector is a huge success story, with innovation and disruptive technology challenging the hegemony of the established elite.
This is despite existing challenges, which include funding, attracting and retaining talent in a competitive environment and validating and commercialising new concepts before the competition catches up. Perhaps the biggest challenge is the friction that can arise when innovation meets regulation, in an already heavily regulated sector.
So, it's interesting to see some acknowledgement in the press that EU regulation can be a more about greasing the wheels of innovation and providing a more attractive environment in which fintech startups can challenge the established order.
Members of the EU have until 2018 to implement PSD2. Of course if Britain exits the EU, there is no guarantee the Government will implement it. It would be naïve to think an entire industry will just stand aside and let the competition from Shoreditch steal a march. The will to challenge the dominant and incumbent financial firms and level the playing field for fintech has thus far come from the European Commission. This raises the very real spectre of two-tiered regulation. And there’s the rub for UK fintech: investors are just as interested in the regulatory environment as in the calibre of the entrepreneurs they fund. The assumption that investors and entrepreneurs want less regulation is misplaced.