So, with this much on the horizon across the 27 member states, what key developments should fintechs be paying attention to?

Spain’s crypto regulation

Fintech has become one of the most prosperous industries during a time of deep uncertainty. Yet discussions around access to cash, prominent scandals like that of Wirecard and scrutiny of cryptocurrencies have put the sector under a spotlight.

On the latter, Spain is becoming one of the first EU member states to take significant measures against unregulated crypto. Spain’s national securities market commission now has powers to regulate crypto advertising.

While this makes sense given the controversies surrounding some crypto advertising – in particular, adverts on public transport and social media, which offer no filter to protect the underage or otherwise vulnerable – what is most interesting is whether this is a sign other EU states will make similar moves.

While we can’t say for sure, news pieces highlighting how consumers are losing a lot of money to crypto scams means it is very likely more EU counties will follow suit.

What do fintechs need to do?

Watch how crypto firms respond to the new rules in Spain, as it will act as a guide for how other countries may respond.

France (and French fintech) in prime position

France is set to have a lot of political attention this year as the country votes in national elections and takes on the EU presidency. In terms of fintech developments, we’d certainly expect regulation to be a discussion point this year. But business growth is likely to take centre stage. French digital bank Qonto hit a near $5bn valuation in recent weeks. Similarly, Pennylane – aiming to become the top ‘fintech operating system’ for the EU market – received €50 million in funding last month. With this calibre of growth in the French market, politicians will undoubtedly be looking for ways to ensure prosperity continues capitalising on key events like Paris Fintech Forum.

What do fintechs need to do?

Fintechs should carefully consider their options before entering the market. As more investment flows into the region, competition will certainly increase making it more difficult to offer unique solutions to French audiences.

Everywhere in the EU (potentially): new data, platform, and AI regulation

The Digital Markets Act is expected to be approved in the first half of 2022. The legislation impacts search engines, social media companies and other major platforms. It aims to deliver a balanced and competitive environment for tech firms in the EU. The EU is also proposing the Data Act which aims to clarify the right to personal data for people and small businesses. There is also talk of legislation around artificial intelligence that would better outline what is classed as AI and the guidelines for using it.

What do fintechs need to do?

The Digital Markets Act will impact fintechs insofar as its stipulations around communication with customers and the collection and management of data – including financial data – so it will be essential for firms to watch closely to see how the act affects data-reliant tech like Open Banking in the UK. AI regulation is a way off, but with more and more fintechs implementing AI and machine learning, a more universal, accurate definition and guidelines have the potential to impact many firms. This could make using AI more complicated, but a new definition will help to outline the parameters of the technology for all.