The European Commission has unveiled an Action Plan on how to harness the opportunities presented by fintech, including the crowdfunding and peer to business lending sectors

According to the EU commission Europe should become a global hub for Fintech, with EU businesses and investors able to make most of the advantages offered by the Single Market in this fast-moving sector. The Commission is also putting forward new rules that will help crowdfunding platforms to grow across the EU’s single market so that a platform licensed in one country can operate across the EU.

Valdis Dombrovskis, Vice-President responsible for Financial Stability, Financial Services and Capital Markets Union, said: “To compete globally, Europe’s innovative companies need access to capital, space to experiment and scale to grow. This is the premise for our FinTech Action Plan. An EU crowdfunding licence would help crowdfunding platforms scale up in Europe. It will help them match investors and companies from all over the EU, giving more opportunities for firms and entrepreneurs to pitch their ideas to a wider base of funders.”

When investors in Germany can back small businesses in Bulgaria, either through loans or equity, it changes the market dramatically, potentially leading to high growth in some states and high returns for investors in others.

Oliver Gajda, Exec director European Crowdfunding Network was interviewed at Fintech North, viewable here. “Without that kind of interchange it must be very hard to achieve any kind of standardisation across the industry… It’s basically impossible …so what we have done in the crowdfunding and peer to peer lending space is to have a soft discourse and distribute knowledge on the market…we’ve also done research on platform operators and their operational challengers when they go cross border… in some instances, every member state, every regulatory body, have completely different views to others.”

And therein the problem. How long it will take to establish a cohesive EU wide regulatory framework for crowdfunding? That remains to be seen. And of course, the Brexit question hovers in the background, although in this instance a regulatory compatibility will undoubtably benefit all.

Daniel Rajkumar from Whitelabel Crowdfunding had this to say “While we have had the cooperation of BaFin and other regulators, each regulator has nuanced differences. A single regulatory framework will reduce complexity and encourage rapid expansion throughout Europe. WLCF customers using our peer to peer lending platform can benefit from our experience as well as relationship with rebuildingsociety.com (for compliance expertise and the appointed representative offering) and also Web-Translations for their professional translation services.”

Helene Panzarino, Managing Director at Rainmaking Colab had this to say.

In my capacity as a representative for a UK FinTech Standards Advisory Board, I’ve noticed the desire for crowdfunding platforms and associations to welcome standards and regulation in order to build trust and rigour in governance and practice, comes up when considering the pan-European landscape. 

Full article available at https://www.rebuildingsociety.com/eu-standardise-crowdfunding-regulations/