The role of fintechs in the PSD2 scenario

2 min reading
The role of fintechs in the PSD2 scenario
The role of fintechs in the PSD2 scenario


Fintechs have really shaken the banking sector, by pushing institutions to innovate, adopt a new corporate culture, and look for alternatives to generate attractive products and services for clients in a sector that, since 2018, bears little resemblance to the past.

Fintechs have also become an industry themselves, with clear attraction for private investment and a specific contribution to the European Union regulatory decisions.

Fintech companies have become one of the protagonists of a new era, with the approval of the European institutions which, in search of greater innovation and optimization of the services in favor of the citizens of Member States, have contributed to this process with legislation that represents a major departure, e.g. PSD2.

Around these legislative changes, United Kingdom has become one of the pillars of investment and launch of fintech companies in the world, and the most significant pillar in the European market.

Worldwide, according to the report “Fintech. Anything but alternative,” by GP Bullhound, private investment in fintechs was already up to USD 13.6 billion in 2016, following the upward curve from 2.9 billion in 2013.

“Unicorn” companies in fintech

The United Kingdom is the leading country in the creation and investment in fintechs in Europe but, at a global level, the main leaders in the sector are China and the United States. Every year, CB Insights updates a list of the “unicorn” companies in the world, i.e. those valued at more than USD 1 billion.

If we look at the number of “unicorn” startups in fintech in January 2019, China added 7 companies with an aggregate value of USD 56.544 billion, including the most valued “unicorn” company in the world:, at 38 billion.

The United States had 14 companies with a value of USD 55.718 billion, and the United Kingdom had 6 companies accounting for 11.123 billion.

Spain has no such company yet. In the rest of Europe, Sweden and Switzerland registered a “unicorn” each, for USD 2.5 billion and USD 1 billion respectively.

The USA has a greater number of companies in the sector, but the progress in Asia and the high value of its “unicorn” companies (with China as the undisputed leader) are truly surprising.

The fintech market is experiencing profound changes, not only because of the PSD2, but also because of the need for capital to finance its expansion, and how private funds and investors want to commit to its growth to take control of the best assets.

This is a decisive investment focus to which financial institutions added two strategies: either forge alliances with fintech companies to exploit products and services together, acquire them to create new products and promote changes in their corporate culture; or set up their own strategy based on the development of API services for third parties.

Since the entry into force of legislation such as the PSD2, fintechs have officially become a player in the financial sector. A sector that has grouped into the European Fintech Alliance (EFA), an organization of more than 70 companies which strives to have the EBA and the European Commission make decisions favorable to their commercial interests.

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