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US software giant Oracle will centre its European financial technology (fintech) programme in Brussels as European centres become increasingly attractive to fintech investments post-Brexit.
Oracle chose the Belgian capital to host its Fintech Innovation Programme due to its proximity to European financial institutions and to the European Commission (EC).
It will now dedicate more European staff and resources to setting up what it described as “mutually monetisable” relationships with fintechs and digital banking startups through a partnership with public and private sector ecosystem B-Hive Europe.
B-Hive Europe is a Brussels-based fintech platform that brings together major banks, insurers and market infrastructure players.
Belgium’s minister of finance, Johan Van Overtveldt, said he expects the relationship to accelerate financial innovation in Belgium and Europe. “It further strengthens Brussels as a pan-European hub for fintech and contributes to our strategy to focus on attracting niche financial activities, such as fintech, insurance and market infrastructures,” he said.
Rik De Deyn, senior innovation director at Oracle, said Brussels was chosen because of its excellent location. “Brussels is easy to reach from most European financial hubs, close to the European Commission, and an ideal location to bring together fintech innovators and financial institutions,” he said.
“Our work with B-Hive Europe will inevitably result in a faster time to innovation-value for banks and insurers, and accelerated monetisation for fintechs,” he added.
While Brexit was not mentioned as a reason for choosing Brussels, London would have been the logical place to set up such a centre before the UK Brexit referendum, but with UK firms now set to lose access to the European Union (EU) single market, this is no longer the case.
At a recent House of Lords EU committee meeting, Russ Shaw, founder of Tech London Advocates and Global Tech Advocates – which is a network of entrepreneurs and tech experts that support the UK tech startup sector –warned of dire consequences for tech startups, particularly those in the fintech sector.
He stopped short of telling these firms to move their headquarters to an EU country, but recommended they set up a presence.
“If we go over this cliff edge, it will be immensely disruptive. The entrepreneurs that I meet say they will just get on with it and make the best of it, but it will be a very disruptive process for a number of them, particularly those in the fintech sector,” he said.
“That is one of the most vibrant aspects of the tech community in London, and many of the companies will need passporting rights.”
David Bannister, financial services analyst at Ovum, said the impact of Brexit on fintech will be small compared with how it affects banks dealing with concerns such as the General Data Protection Regulation (GDPR) and cyber security after the UK leaves the EU.
“Brexit is a bit of a side show in fintech, as open banking will internationalise everything,” he added.
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