On 3 July 2020, the Dutch Minister of Finance and the Secretary of State for Economic Affairs published an action plan to support the Dutch Fintech sector.
Dutch fintech Census 2019
The action plan follows from the Dutch fintech Census 2019, which profiled the Dutch fintech-sector and presented factors to stimulate growth and innovation. The census concluded that the Netherlands has a strong starting position for the further development of its fintech sector. This is partly reflected in the fact that a relatively high number of fintech companies are based in the Netherlands, with many expecting significant growth in turnover and personnel. Dutch customers are also embracing new technologies and developments relatively quickly.
More generally, the census shows that the favorable business climate for fintechs in the Netherlands is due to a number of unique features, such as its digital infrastructure and proficiency in English. The high quality of financial supervision is also perceived as a positive factor.
It is noted that the study was performed before the COVID-19 crisis. This crisis will likely have an effect on the growth of the fintech sector. However, the report contains recommendations for the state concerning the growth potential of the sector that remain relevant; for example, Dutch fintech companies may play a key role in providing continuous access to funding during the COVID-19 crisis.
Dutch fintech-sector action plan
An important observation from the census stated that while the Netherlands has a favorable business climate, the government could still do more to promote it. The Dutch cabinet responded to this comment by publishing its action plan.
The action plan translates the directions for initiatives to support the fintech sector more intensively into more concrete guidelines.
The government endorses the importance of a high degree of digitalization and innovation to stimulate a diverse and competitive financial sector, create more freedom of choice for consumers and stimulate a healthy market economy.
To this end, the action plan contains three different action lines, which themselves are divided into more concrete goals and points of action:
1. Putting the Dutch fintech the sector on the map, both nationally and internationally. Concrete goals are:
- that Dutch fintech companies can find their way abroad, and foreign fintech companies and investors are able to find the Netherlands.
- The government intends to address this by (i) focusing with the sector on an international agenda, (ii) propagating the attractiveness of the Netherlands as a fintech country, and (iii) entering into partnerships with countries at the forefront of fintech, such as Singapore and Israel;
- that fintech companies are able to attract the capital they need in order to grow, domestically as well as internationally. The actions the government intends to take in this regard include proposals to further strengthen the European Capital Market Union.
- that Dutch customers are well equipped to make the right choices when it comes to innovative financial services, including through informing consumers about the opportunities and risks of financial innovation.
2. Ensuring good access to knowledge and talent for fintech companies. Concrete goals are:
- that fintech companies obtain access to information about regulations and procedures that are relevant to them.
- The government intends to (i) organize a periodic fintech roundtable, (ii) create a forum for identifying opportunities and obstacles, (iii) develop a website with the most important information, (iv) strengthen the InnovationHub and initiating the DNB Innovation forum, (v) study the possibilities of the creation of an InnovationHub and sandbox at EU level, (vi) investigate possible improvements to current regulatory licensing processes.
- that fintech companies can attract the right talent. The government’s actions in this regard include developing a residence arrangement for essential staff in relation to startups, developing a branding strategy and information page focused on retaining and attracting international talent, and making the option of granting stock option rights as remuneration more attractive
3. Ensuring regulations are ready for the future and offer space for innovation. Concrete goals are:
- that Dutch fintech companies are not held to stricter requirements than strictly necessary, by keeping an eye on the proportionality of legislation for small and start-up companies and by paying attention to proportionality of the costs of supervision.
- that there is a European and international focus on harmonizing financial regulation and supervision to ensure consistency across the EU;
- that legislation and policies are adapted to existing and upcoming innovative services and products. The government’s actions to achieve this include focusing on EU regulations for cryptocurrencies (including stablecoins) and the use of digital ledger technologies in the financial sector, focusing on EU regulations for cyber security in the financial sector, implementing a European crowdfunding framework, and introducing regulations for robo-advice;
- that innovation is stimulated by regulations and policies, alongside further research at EU and international level on the possibilities of electronic central bank money.
To keep track of the Dutch position, the Dutch Minister of Finance and the Secretary of State for Economic Affairs intend to perform another fintech census within two years.
At the beginning of 2021, the Dutch Minister of Finance and the Secretary of State for Economic Affairs will provide an update on the status of the implementation of the current fintech action plan.