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<strong>Belgium</strong>: <strong>an</strong> <strong>unexpected</strong><br />
<strong>ideal</strong> <strong>hub</strong> <strong>for</strong> <strong>FinTech</strong> ?<br />
Belgi<strong>an</strong> <strong>FinTech</strong> report 2016 - Key Findings<br />
Belgi<strong>an</strong> <strong>FinTech</strong> report 2016 Key Findings |<br />
1
<strong>Belgium</strong> has historically been a ground of innovation <strong>for</strong> Fin<strong>an</strong>cial Services (FS). On average, the<br />
Belgi<strong>an</strong> customer is well served with regards to the quality, the availability as well as the price of<br />
services. Nevertheless, with the innovation pace const<strong>an</strong>tly increasing, good ideas are rapidly copied,<br />
leaving less room <strong>for</strong> a ‘test’ market. Furthermore, there is limited focus on <strong>Belgium</strong> from international<br />
firms. Indeed, being a very small country, its complexity c<strong>an</strong>not be compensated by its size.<br />
In this context, one is allowed to wonder: c<strong>an</strong> <strong>Belgium</strong> remain a fertile l<strong>an</strong>d <strong>for</strong> innovation… or should<br />
we expect our talents to go <strong>an</strong>d develop their ideas in our neighboring countries, where they believe<br />
the grass could be greener?<br />
To <strong>an</strong>swer this question, <strong>an</strong>d m<strong>an</strong>y more, EY has <strong>an</strong>alyzed the key conditions required <strong>for</strong> <strong>Belgium</strong> to<br />
be – <strong>an</strong>d remain – at the <strong>for</strong>efront of innovation in Fin<strong>an</strong>cial Services. The results to be found in this<br />
report show a contrasted view <strong>an</strong>d highlight some challenges ahead but also leave room <strong>for</strong> optimism…<br />
provided that we are ready to think like entrepreneurs. To each problem, there are at least three<br />
solutions. The right mindset, the right partner <strong>an</strong>d the resources are all you need to start exploring<br />
them. Shall we start?<br />
Table of contents<br />
What makes a <strong>FinTech</strong> ecosystem successful ? 4<br />
Dem<strong>an</strong>d 6<br />
Talent 10<br />
Capital 12<br />
Policy 13<br />
Recommendations 14<br />
Y<strong>an</strong>nick Grécourt<br />
Stategy, Customer & Operations Partner<br />
2 | Belgi<strong>an</strong> <strong>FinTech</strong> report 2016 Key Findings Belgi<strong>an</strong> <strong>FinTech</strong> report 2016 Key Findings | 3
In order <strong>for</strong> a <strong>FinTech</strong><br />
ecosystem to function<br />
optimally, four core<br />
attributes are required:<br />
dem<strong>an</strong>d, talent, capital<br />
<strong>an</strong>d policy.<br />
Are these attributes<br />
sufficiently present<br />
to make <strong>Belgium</strong> a<br />
place <strong>for</strong> <strong>FinTech</strong> <strong>an</strong>d<br />
innovation?<br />
What we hear in the market...<br />
A<br />
B<br />
Dem<strong>an</strong>d<br />
End-client dem<strong>an</strong>d across consumers, corporates<br />
<strong>an</strong>d fin<strong>an</strong>cial institutions (Fis)<br />
“Currently there are no real <strong>FinTech</strong>s in<br />
<strong>Belgium</strong>, there’s no market dem<strong>an</strong>d <strong>for</strong> these<br />
services, also the market is too complex”<br />
Talent<br />
The availability of technical, FS <strong>an</strong>d<br />
entrepreneurial talent.<br />
“The best Belgi<strong>an</strong> talent is<br />
already working abroad. The<br />
others aren’t really interested“<br />
92%<br />
With 92% of <strong>FinTech</strong> adoption<br />
focused on Payment solutions,<br />
adoption is low <strong>an</strong>d strongly<br />
focused. Supply in other<br />
domains is low.<br />
The capabilities <strong>an</strong>d people are there to make<br />
it work. <strong>Belgium</strong> has always been at the <strong>for</strong>efront<br />
of innovative technologies applied to the fin<strong>an</strong>cial<br />
system (e.g. Swift, Clear2Pay).<br />
... is very different from what our research has shown:<br />
Compared to our global results, Belgi<strong>an</strong> consumers are especially<br />
sensible to newcomers that focus on better customer<br />
experience, quality <strong>an</strong>d the flexibility of services.<br />
60%<br />
of Europe’s purchasing power is within 500km. Hence if you c<strong>an</strong><br />
meet dem<strong>an</strong>d in <strong>Belgium</strong>, scaling to these markets is easy.<br />
51 st<br />
R<strong>an</strong>ked 51st in entrepreneurial activity.<br />
Belgi<strong>an</strong>s have difficulties taking initiative <strong>an</strong>d<br />
starting a comp<strong>an</strong>y up themselves.<br />
C<br />
Capital<br />
The availability of<br />
fin<strong>an</strong>cial resources<br />
<strong>for</strong> start-ups <strong>an</strong>d<br />
scale-ups.<br />
“It’s difficult to find<br />
money in <strong>Belgium</strong> to<br />
start, to grow you need<br />
to move away”<br />
€150 Mio<br />
has been invested in BeTech in 2015.<br />
<strong>Belgium</strong> was long lagging behind its peers in Europe with<br />
respect to Funding. However from 2015, we’ve seen quite<br />
the catch up <strong>an</strong>d <strong>for</strong> 2016 we’re seeing this getting doubled.<br />
Our approach<br />
For this report we’ve conducted<br />
several external interviews with<br />
leaders in b<strong>an</strong>king <strong>an</strong>d Fintech<br />
as well as policy makers. We<br />
have also conducted a survey<br />
on the <strong>FinTech</strong> adoption in the<br />
Belgi<strong>an</strong> market.<br />
D<br />
Policy<br />
Government policy across regulations, tax <strong>an</strong>d sector growth<br />
initiatives.<br />
“Paying <strong>for</strong> talent has become too expensive,<br />
moreover the regulator isn’t ready to be talking to<br />
startups about fin<strong>an</strong>cial services”<br />
Several initiatives have been taken by the governments of <strong>Belgium</strong> to lower<br />
the administrative <strong>an</strong>d tax burdens <strong>for</strong> start-ups.<br />
The FSMA as Belgi<strong>an</strong> regulator is also slightly opening the door <strong>for</strong><br />
discussions with Fintechs. However this is still in <strong>an</strong> exploration stage.<br />
Yes, <strong>Belgium</strong> has great potential, however it needs to accelerate <strong>an</strong>d the timing is now !<br />
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A<br />
Dem<strong>an</strong>d<br />
<strong>FinTech</strong> adoption in <strong>Belgium</strong><br />
Why use <strong>FinTech</strong>?<br />
Compared to other countries, Belgi<strong>an</strong> b<strong>an</strong>ks today<br />
are already offering quite convenient solutions.<br />
Hence compared to global results, Belgi<strong>an</strong>s are<br />
especially looking <strong>for</strong> solutions that c<strong>an</strong> improve <strong>an</strong>d<br />
broaden their overall experience.<br />
Easy to setup account<br />
Better online experience<br />
& functionality<br />
Access to different<br />
products & services<br />
Better quality of service<br />
More attractive rates/fees<br />
More innovative products<br />
th<strong>an</strong> at traditional b<strong>an</strong>ks<br />
Greater level of trust th<strong>an</strong><br />
with traditional institutions<br />
Our <strong>FinTech</strong> adoption survey shows that<br />
customers use <strong>FinTech</strong> <strong>for</strong> a variety of<br />
reasons. In addition there is a real appetite<br />
from customers <strong>for</strong> solutions that enh<strong>an</strong>ce<br />
their experience. However, the low supply<br />
makes <strong>for</strong> a low adoption in this domain.<br />
11,20%<br />
21,22%<br />
12,40%<br />
21,03%<br />
10,30%<br />
17,02%<br />
15,40%<br />
15,68%<br />
5,50%<br />
13,00%<br />
1,80%<br />
11,09%<br />
28,87%<br />
43,40%<br />
In <strong>Belgium</strong> there is a strong correlation between users<br />
of other online service providers <strong>an</strong>d <strong>FinTech</strong> users.<br />
Over 56,5% of Spotify users <strong>an</strong>d 54,5% of Twitter users<br />
are <strong>FinTech</strong> adopters.<br />
56,50%<br />
54,50%<br />
52,90%<br />
52,70%<br />
32,77%<br />
26,00%<br />
27,40%<br />
32,50%<br />
37,48%<br />
49,00%<br />
45,30%<br />
39,90%<br />
26,61%<br />
17,30%<br />
Spotify<br />
Twitter<br />
Instagram<br />
Just Eat<br />
Airbnb<br />
LinkedIn<br />
Facebook<br />
Among <strong>FinTech</strong>, user adoption in <strong>Belgium</strong> is low with payments as a sole outlier.<br />
• Our survey has shown that almost all <strong>FinTech</strong> usage in <strong>Belgium</strong> originates from digital payments. This is logical<br />
because of two reasons. Firstly, <strong>Belgium</strong> has always had strong roots in the payment industry. Secondly because<br />
of the rise of e-commerce in the last decade, Fin<strong>an</strong>cial Technology that enables online payments has been<br />
adopted signific<strong>an</strong>tly by end users.<br />
• Early on, in the savings <strong>an</strong>d investment domain <strong>Belgium</strong> saw a few digital-only brokerage plat<strong>for</strong>ms like Keytrade<br />
<strong>an</strong>d Binckb<strong>an</strong>k. These comp<strong>an</strong>ies are now being followed by newcomers like Easyvest <strong>an</strong>d Sw<strong>an</strong>est.<br />
• In other domains like borrowing <strong>an</strong>d insur<strong>an</strong>ce, we see a lower adoption due to a low supply. Some plat<strong>for</strong>ms in the<br />
crowd lending space <strong>an</strong>d some smaller telematics solutions in insur<strong>an</strong>ce are present but their adoption is not signific<strong>an</strong>t.<br />
• Our research has also shown that a lot of successful <strong>for</strong>eign <strong>FinTech</strong>s are currently not targeting <strong>Belgium</strong> as they<br />
regard the market as too small <strong>an</strong>d complex to enter.<br />
36%<br />
of the 523 respond<strong>an</strong>ts<br />
are <strong>FinTech</strong> users<br />
Savings/investments<br />
• Online stockbroking/<br />
spreadbetting<br />
• Online budgeting/pl<strong>an</strong>ning<br />
• Online investments<br />
• Equity <strong>an</strong>d rewards<br />
crowdfunding<br />
• P2P<br />
Borrowing<br />
• Borrowing via P2P<br />
websites<br />
29,9%<br />
Savings/<br />
investments<br />
Insur<strong>an</strong>ce<br />
• Car insur<strong>an</strong>ce using<br />
telematics<br />
• Health insur<strong>an</strong>ce premium<br />
aggregators<br />
10,2% 12,3%<br />
94,7%<br />
Borrowing Insur<strong>an</strong>ce Money tr<strong>an</strong>sfer/<br />
payments<br />
Money tr<strong>an</strong>sfer/<br />
payments<br />
• Non-b<strong>an</strong>ks to tr<strong>an</strong>sfer<br />
money<br />
• Online <strong>for</strong>eign exch<strong>an</strong>ge<br />
• Overseas remitt<strong>an</strong>ces<br />
Global<br />
<strong>Belgium</strong><br />
Source : EY, 2016,” <strong>FinTech</strong> Adoption Data : Belgi<strong>an</strong> data”<br />
Source : EY, 2016,” Percentage of <strong>FinTech</strong> users who have used each category of product : Belgi<strong>an</strong> data”<br />
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A<br />
Dem<strong>an</strong>d<br />
From a B2B point of<br />
view, there is more<br />
supply of fin<strong>an</strong>cial<br />
technology players<br />
traditionally with a<br />
focus on payments<br />
<strong>an</strong>d infrastructure.<br />
• While the supply in <strong>Belgium</strong> on the B2C side is low, we see a higher amount of<br />
<strong>FinTech</strong> comp<strong>an</strong>ies that focus on B2B. Moreover, <strong>an</strong>y signific<strong>an</strong>t funding into<br />
<strong>FinTech</strong>s has happened in startups that were B2B oriented.<br />
• These comp<strong>an</strong>ies have scaled beyond <strong>Belgium</strong> <strong>an</strong>d penetrated into a set of new<br />
markets. Here we see that besides the US, which is often selected <strong>for</strong> funding<br />
reasons, Belgi<strong>an</strong> <strong>FinTech</strong>s prefer to scale to neighboring countries.<br />
• If we consider supply <strong>an</strong>d funding as a proxy <strong>for</strong> dem<strong>an</strong>d we c<strong>an</strong> conclude that<br />
these businesses generate sufficient dem<strong>an</strong>d to be viable. Yet again, they are<br />
strongly focused on supporting payment flows.<br />
Focus Stage Geography Last capital increase<br />
Infrastructure Growth BE, NL, LUX €10.0 million<br />
Expense reporting Growth BE, US, NL, UK, €5.5 million<br />
BR, SP, DE<br />
Factoring Growth FR , NL<br />
€3 million<br />
Cashflow Growth BE, US<br />
€1.1 million<br />
Dem<strong>an</strong>d from Fin<strong>an</strong>cial Institutions: Belgi<strong>an</strong> fin<strong>an</strong>cial institutions are starting to look into <strong>FinTech</strong>s<br />
<strong>an</strong>d are willing to invest. However they are at a nascent stage. Currently, none of the tier-1 b<strong>an</strong>ks<br />
are really leading the pack when it comes to embedding innovation into their org<strong>an</strong>ization.<br />
Acquisitions<br />
VC model<br />
Incubator<br />
model<br />
Partnerships<br />
BNPPF with Ulule.com (a crowdfunding plat<strong>for</strong>m)<br />
<strong>an</strong>d ING with Qustomer (Customer Loyalty) are<br />
examples of recent acquisitions. Note that these<br />
b<strong>an</strong>ks are subsidiaries of larger Europe<strong>an</strong> groups.<br />
KBC Securities via the KBC Start it Fund (€10<br />
mio) provides seed <strong>an</strong>d development fin<strong>an</strong>ce <strong>for</strong><br />
start-up businesses. ING <strong>Belgium</strong> partnered with<br />
SmartFin to offer exp<strong>an</strong>sion capital (€ 75 mio) to<br />
<strong>FinTech</strong>s.<br />
ING with <strong>FinTech</strong> village is focusing specifically<br />
on the <strong>FinTech</strong> market. KBC via KBC Start It <strong>an</strong>d<br />
BNPPF with Co-Station have incubators that target<br />
a broader scope of promising start-ups.<br />
Belfius is looking to remain first <strong>for</strong> a certain<br />
amount of time through a number of partnerhips<br />
(e.g.NG Data )<br />
Payments Growth BE<br />
€1.0 million<br />
Infrastructure Seed BE, US<br />
€0.8 million<br />
Expense reporting Seed BE<br />
€0.5 million<br />
Source: CB insights; Dealroom.co<br />
Active Nascent activity<br />
No activity<br />
Source: EY <strong>an</strong>alysis, Focused on initiatives within the Belgi<strong>an</strong> market.<br />
“We see two opportunities<br />
with <strong>FinTech</strong>, integrating their<br />
solution in our offering as a b<strong>an</strong>k<br />
<strong>an</strong>d diversifying our streams of<br />
revenue.”<br />
CEO of a Belgi<strong>an</strong> B<strong>an</strong>k<br />
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B<br />
Talent<br />
Sources: « L<strong>an</strong>dscaping UK <strong>FinTech</strong> », EY, 2014;<br />
Comp<strong>an</strong>ies websites; Agoria B<strong>an</strong>king Club<br />
• <strong>Belgium</strong> has always been at the <strong>for</strong>efront of innovative technologies applied to the fin<strong>an</strong>cial system (e.g. development<br />
of the Digipass, first country to use a national clearing system, etc.) with a special emphasis on Payments services.<br />
• Belgi<strong>an</strong> Fintech market is currently fueled by the growing impact of digitalization in fin<strong>an</strong>cial services, ch<strong>an</strong>ging<br />
customer behavior <strong>an</strong>d a lack of innovation <strong>an</strong>d investment by incumbent providers that are currently struggling with<br />
their margins <strong>an</strong>d regulatory ch<strong>an</strong>ges.<br />
• These org<strong>an</strong>izations have been built by people with the <strong>ideal</strong> skillset to power a <strong>FinTech</strong> today, r<strong>an</strong>ging from Fin<strong>an</strong>cial<br />
Services expertise, technology until innovation. In addition these comp<strong>an</strong>ies have been involved in some signific<strong>an</strong>t deals.<br />
Payments<br />
Plat<strong>for</strong>ms<br />
Belgi<strong>an</strong> Fintech ecosystem has a long<br />
history of success stories with wellestablished<br />
comp<strong>an</strong>ies …<br />
Software & Data <strong>an</strong>alytics<br />
Historical signific<strong>an</strong>t <strong>FinTech</strong> deals<br />
• Clear2Pay acquired by FIS (US) <strong>for</strong> MEUR 375 in 2014<br />
• Ogone purchased by Ingenico (FR) <strong>for</strong> MEUR 360 in 2013<br />
• Immoweb acquired by Axel Springer Digital Classifieds<br />
(JV GE-US) <strong>for</strong> MEUR 128 in 2012<br />
• Callataÿ & Wouters purchased by Sopra B<strong>an</strong>king<br />
Software (FR) (2012)<br />
• Keytrade B<strong>an</strong>k acquired by Credit Agricole (FR) <strong>for</strong><br />
MEUR 45 in 2005<br />
<strong>Belgium</strong> has the right talents available… but they prefer to stay in their com<strong>for</strong>t zone within big<br />
corporations.<br />
• Evidence shows that the work<strong>for</strong>ce in <strong>Belgium</strong> presents<br />
a large p<strong>an</strong>el of skills correlated with a strong<br />
fin<strong>an</strong>cial market. Yet people tend to stay within big<br />
corporations <strong>an</strong>d fear to jump into entrepreneurship.<br />
Furthermore we see the same tendency in education.<br />
There, compared to neighboring countries, <strong>Belgium</strong><br />
scores extremely low on graduates that start their own<br />
comp<strong>an</strong>y after school. This hampers the innovation<br />
l<strong>an</strong>dscape.<br />
6%<br />
5,4%<br />
5%<br />
5,5%<br />
2011 2012 2013 2014 2015<br />
Low entreprenarial activity in <strong>Belgium</strong><br />
(r<strong>an</strong>k 51/62)<br />
Source: Global Enterpreneurship Monitor, Global Report 2015<br />
“Of all those whom I’ve fought the<br />
Belgi<strong>an</strong>s were the bravest”<br />
Julius Caesar, 58–49 BC, De Bello<br />
Gallico<br />
6,4%<br />
• In response to that we should pay attention to<br />
the example of Finl<strong>an</strong>d. After the b<strong>an</strong>kruptcy of<br />
Nokia, the country leveraged its base of high skilled<br />
developers to build <strong>an</strong> ecosystem of start-ups. As<br />
a consequence its in<strong>for</strong>mation technology industry<br />
literally soared.<br />
Exibit 1:<br />
• The collapse of Nokia led to innovation in Gaming<br />
<strong>an</strong>d currently could explain the number of new<br />
<strong>FinTech</strong> ventures in Finl<strong>an</strong>d.<br />
• In June 2012, Nokia slashed 3,700 jobs in<br />
Finl<strong>an</strong>d. In April that year, 220 start-ups had been<br />
launched by <strong>for</strong>mer Nokia employees. Notable<br />
start-ups would include Rovio (Angry birds) or<br />
Kiosked which raised more th<strong>an</strong> $33 million <strong>an</strong>d<br />
has recently exp<strong>an</strong>ded to the US.<br />
• After the downsizing at Nokia, <strong>an</strong> import<strong>an</strong>t<br />
skilled work<strong>for</strong>ce was unemployed. Given the<br />
large size of this pool, part of it decided to create<br />
their own tech ventures. This led to a total of 179<br />
game studios created between 2011 <strong>an</strong>d 2014,<br />
currently representing $1.0 billion in revenues.<br />
• It is likely that a similar thing happened in London<br />
following the 2008 fin<strong>an</strong>cial crisis <strong>an</strong>d the<br />
emergence of their <strong>FinTech</strong> <strong>hub</strong>.<br />
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C<br />
Capital<br />
D<br />
Policy<br />
Money <strong>for</strong> taking off is up <strong>for</strong><br />
grabs. After seed <strong>an</strong>d early<br />
stage, raising money in <strong>Belgium</strong><br />
may remain challenging.<br />
The regulator’s door is slightly<br />
open, but increasing government<br />
support is contradicted by<br />
administration <strong>an</strong>d high taxes.<br />
Funding levels of start-ups<br />
in <strong>Belgium</strong><br />
Seed <strong>an</strong>d Early stage money is<br />
fairly easy to find but further<br />
funding possibilities may<br />
prove to be more challenging<br />
afterwards. In this case we see<br />
that most <strong>FinTech</strong>s are drawn<br />
to the larger <strong>FinTech</strong> <strong>hub</strong>s to<br />
attract money.<br />
<strong>Belgium</strong> was long lagging<br />
behind its peers in Europe with<br />
respect to Funding. However<br />
from 2015, we’ve seen quite<br />
the catch up with investments<br />
already doubling each year.<br />
Also, Crowdfunding is expected<br />
to reach ± 6.5 million by 2016.<br />
Revenues<br />
Government gr<strong>an</strong>ts (e.g., R&D), SME purchasing focus<br />
Incubator/accelerator<br />
Crowdfunding<br />
Entrepreneur, friends, family<br />
Seed/early-stage VC<br />
Angels<br />
EUR 5 million<br />
Pre-seed Seed Start-up<br />
Funding gap<br />
Corporate accelerators<br />
EUR 0,5 million<br />
Formal VC/growth capital<br />
Government export schemes, gr<strong>an</strong>ts<br />
Speciality b<strong>an</strong>k lo<strong>an</strong>s <strong>an</strong>d guar<strong>an</strong>tees<br />
Public stock markets<br />
Private equity<br />
Corporate VC<br />
Emerging Rapid-growth Exp<strong>an</strong>sion / market leader<br />
Development stage<br />
EUR 10 million<br />
EUR 5,2 million<br />
The representation above maps the stages of a comp<strong>an</strong>y’s development<br />
to the availability of capital in the Belgi<strong>an</strong> market.<br />
Sources: « L<strong>an</strong>dscaping UK <strong>FinTech</strong> », EY, 2014 ; mtlnewtech.com; Claire Munck, CEO Be Angels;<br />
«G20 Entrepreneurship Barometer », EY, 2013; Belgi<strong>an</strong> Web Startups Barometer 2012;<br />
Europe<strong>an</strong> Trade Association <strong>for</strong> Business Angels, Seed Funds <strong>an</strong>d Early Stage Market Players<br />
Regulation as a first mover adv<strong>an</strong>tage<br />
“The regulator is open to innovative business models, yet<br />
(as a <strong>FinTech</strong>) you are not on the top of their list, which<br />
slows down the license acquisition system.”<br />
<strong>FinTech</strong> <strong>Belgium</strong><br />
In terms of regulation, Belgi<strong>an</strong> supervisors are slowly<br />
investigating this emerging trend. Moreover in June<br />
2016 the FSMA (Fin<strong>an</strong>cial Services <strong>an</strong>d Markets<br />
Authority) launched “the <strong>FinTech</strong> Portal”, which is<br />
intended to support a dialogue between the FSMA<br />
<strong>an</strong>d <strong>FinTech</strong> comp<strong>an</strong>ies. Nevertheless it remains a<br />
rather hesit<strong>an</strong>t first step, especially compared to other<br />
countries such as the UK (see Exibit) that have created<br />
environments to foster innovation. Such a “s<strong>an</strong>dbox”<br />
principle allows start-ups to explore ideas with a small<br />
subset of potential clients albeit well contained <strong>an</strong>d<br />
overlooked by the regulator.<br />
Exibit 2:<br />
• The FCA, the regulator in the UK, installed a<br />
regulatory s<strong>an</strong>dbox to which you c<strong>an</strong> apply twice<br />
a year. If the application is successful, you c<strong>an</strong> try<br />
your business model <strong>for</strong> six months without the<br />
regulatory burden <strong>an</strong>d then focus on obtaining<br />
required licenses.<br />
Support is increasing yet administration is burdening…<br />
“We do not need more subsidies, some <strong>FinTech</strong><br />
entrepreneurs spend more time obtaining subsidies th<strong>an</strong><br />
acquiring clients.”<br />
<strong>FinTech</strong>, <strong>Belgium</strong><br />
Ef<strong>for</strong>ts from the government have been made to develop<br />
the in<strong>for</strong>mation technology sector through job creation<br />
<strong>an</strong>d investment solutions <strong>for</strong> digital SMES. Yet <strong>Belgium</strong><br />
is suffering from its political structure that burdens the<br />
administration related to entrepreneurship.<br />
…just as are taxes<br />
“The Government should reduce the requirements <strong>for</strong><br />
comp<strong>an</strong>ies when hiring a first employee.”<br />
<strong>FinTech</strong>, <strong>Belgium</strong><br />
<strong>Belgium</strong> is a country in which taxation of the labour <strong>for</strong>ce<br />
is the highest in Europe, with 59.4% of the salary costs<br />
going to the government. There<strong>for</strong>e, it is challenging <strong>for</strong><br />
start-ups to af<strong>for</strong>d hiring numerous employees quickly.<br />
Yet, there are various initiatives from the government to<br />
reduce these costs, which makes it cheaper to attract the<br />
first set of employees. However it remains hindering in<br />
the growth stage.<br />
12 | Belgi<strong>an</strong> <strong>FinTech</strong> report 2016 Key Findings Belgi<strong>an</strong> <strong>FinTech</strong> report 2016 Key Findings | 13
What c<strong>an</strong> each member of the eco-system do<br />
to foster <strong>an</strong> innovation climate in <strong>Belgium</strong> ?<br />
Your EY contacts<br />
Our recommendations<br />
For fin<strong>an</strong>cial<br />
institutions<br />
Your <strong>FinTech</strong> talent is<br />
using the same coffee<br />
machine as you:<br />
Create a culture of intra<br />
<strong>an</strong>d-entrepreneurship<br />
We don’t need <strong>an</strong> economical crisis or a b<strong>an</strong>kruptcy<br />
to unlock a pool of talent to flourish innovation. Great<br />
talents with the right skill sets are today safely nested<br />
within the org<strong>an</strong>izations. They need to be activated.<br />
This c<strong>an</strong> be done in a two-fold m<strong>an</strong>ner:<br />
• Inside the org<strong>an</strong>ization: <strong>for</strong> example, by<br />
implementing “a 20% policy” like Google did. Where<br />
employees c<strong>an</strong> work on initiatives that will most<br />
benefit the b<strong>an</strong>k.<br />
• Outside the org<strong>an</strong>ization: Sponsor risk taking<br />
by offering people the ch<strong>an</strong>ce to pursue their<br />
ideas. This c<strong>an</strong> r<strong>an</strong>ge from sponsoring, through<br />
incubators to direct acquisitions.<br />
Y<strong>an</strong>nick Grécourt<br />
Partner<br />
Strategy, Customer & Operations<br />
y<strong>an</strong>nick.grécourt@be.ey.com<br />
Barbara Freitag<br />
Senior M<strong>an</strong>ager<br />
Tr<strong>an</strong>saction Advisory Services<br />
barbara.freitag@be.ey.com<br />
For entrepreneurs<br />
Belgi<strong>an</strong> consumers are<br />
ready <strong>for</strong> solutions that<br />
offer <strong>an</strong> augmented<br />
customer experience:<br />
Initiate leading the pack<br />
Revalue <strong>Belgium</strong> as<br />
a launch pad <strong>for</strong> your<br />
Europe<strong>an</strong> <strong>FinTech</strong><br />
Our <strong>FinTech</strong> Adoption Index <strong>for</strong> <strong>Belgium</strong> has shown<br />
that Belgi<strong>an</strong>s are open <strong>for</strong> new entr<strong>an</strong>ts that c<strong>an</strong><br />
augment the ease of use <strong>an</strong>d service. However, from<br />
a b<strong>an</strong>king point of view we are lagging behind as well.<br />
There’s a momentum <strong>for</strong> b<strong>an</strong>ks as well as start-ups to<br />
accelerate their innovation pace in order to gain firstmover<br />
adv<strong>an</strong>tage.<br />
Our <strong>an</strong>alysis has shown that if entrepreneurs succeed<br />
in assembling the right team, the momentum is there<br />
to start a successful business. First the dem<strong>an</strong>d (B2C,<br />
B2B as well as FS players) is ready <strong>for</strong> new offerings.<br />
Secondly, as <strong>for</strong>eign comp<strong>an</strong>ies often consider <strong>Belgium</strong><br />
as too complex, you have a greenfield which is easily<br />
scalable towards other Europe<strong>an</strong> core markets. Thirdly<br />
there’s sufficient seed capital available to test initial<br />
ideas. Finally, the regulator is open to conversations on<br />
innovation whereas sufficient programs are installed to<br />
promote <strong>an</strong>d subsides technology startups.<br />
Geert V<strong>an</strong> Kerckhoven<br />
Senior M<strong>an</strong>ager<br />
Strategy, Customer & Operations<br />
geert.v<strong>an</strong>.kerckhoven@be.ey.com<br />
14 | Belgi<strong>an</strong> <strong>FinTech</strong> report 2016 Key Findings Belgi<strong>an</strong> <strong>FinTech</strong> report 2016 Key Findings | 15
EY | Assur<strong>an</strong>ce | Tax | Tr<strong>an</strong>sactions | Advisory<br />
About EY<br />
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16 | Belgi<strong>an</strong> <strong>FinTech</strong> report 2016 Key Findings