Regional focus
The Benelux region – comprised of The Netherlands, Belgium and Luxembourg – is an ideal home for fintechs after Brexit.
prioritise domestically-focused firms, Dutch regulation is amenable to global investors.
Going Dutch
In terms of the retail banking landscape, Luxembourg and Belgium are dominated by foreign entities. However, the majority of Dutch residents bank with local institutions. Top of the list is ING, the 11th largest bank in Europe by assets, which has clients across more than 40 countries.
Simon Boonen, fintech lead at ING, sees a number of benefits to being based here.
“Amsterdam is a very international and open-minded
The Netherlands, meanwhile, is one of Europe’s leading fintech hubs. According to KPMG, 84 fintech companies have applied for licences here over the past five years – the second highest total in Europe behind Lithuania.
8 Statista 1st EF 12
The number of domestic banks in Luxembourg, out of a total of 128 banks.
The Netherlands’ ranking in the global EF English Proficiency Index 2021.
Around 20% of these companies have their headquarters outside the EU, mostly in the US or UK, and have chosen the Netherlands as their entry point to the European market. Examples include Tradeweb, MarketAxess, Azimo, CME and CurrencyCloud. According to the think tank New Financial, 48 firms (mostly in financial services) have shifted operations from London to Amsterdam since the Brexit vote. Though the big investment banks are more likely to set up shop in Paris or Frankfurt (largely due to Dutch caps on bankers’ bonuses), Amsterdam has attracted a proliferation of trading platforms, brokerage firms and fintechs. Along the way, it has overtaken London as Europe’s largest share trading hub. Last year, American equities exchange Cboe launched a new derivatives venture in Amsterdam. The company’s president, Dave Howson, said he saw “substantive growth” in his sector in the Netherlands. As he told Reuters, while other European countries
city, with a highly skilled workforce,” he says. “There is good physical and digital infrastructure. And the regulator is, in general, quite open for conversation around new themes and technologies.” Boonen adds that the country is well positioned to attract talent. In 2021, around a quarter of a million people immigrated to the Netherlands, most of them from elsewhere in Europe. Many would have been attracted by the country’s 30% tax ruling, which gives a tax break to highly skilled migrants moving there for a specific role. It helps that English is the common language in many workplaces, with around 90% of the population speaking English with near-native fluency. “ING prides itself on its diverse and international workforce,” says Boonen. “Some of the points that make Amsterdam or the Netherlands attractive for business also apply to attracting talent. Amsterdam has a good work-life balance and a vibrant tech-oriented business climate. It is a compact city with many great facilities – culture, parks, nightlife – and is close to other appealing hotspots like the beach!” Many of these advantages apply elsewhere in the Benelux too. Generally speaking, the region boasts a rich business ecosystem, with plenty of funding opportunities to help new entrants get off the ground. According to the tech news website Silicon Canals, the region’s start-ups have access to 35 incubators, 97 accelerators, 406 VC funds and 635 business angels. Benelux start-ups secured €6.2bn in venture capital funding in the first three quarters of 2021, a big rise on €2.7bn the year before.
New kids on the block
Among other types of fintech, the region boasts its fair share of neobanks. Some of these are foreign banks looking to corner the Benelux market, such as Germany’s N26 and the UK’s Revolut. The former has been present here since 2016, while the latter launched as a full bank (as opposed to an e-money institution) in January this year.
Others are homegrown challengers, such as the Dutch banks bunq and Knab. bunq was founded in 2012 and obtained its banking licence in 2014. After a long period of self-funding, it secured a €193m investment last year to reach a unicorn valuation of
Future Banking /
www.nsbanking.com
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