Opinion: Europe can regulate its way to a better fintech future

Crypto crashes, money laundering, and digital fraud — the EU’s financial watchdogs have had enough. Regulatory bodies need to keep up by rolling out tighter regulations aimed at strengthening consumer protections and stabilising the market. 

As EU lawmakers scramble to protect consumers, others worry they are smothering growth. Case in point: in 2024, the FCA fined HSBC £6.2mn for not properly treating customers in financial difficulty. The regulatory bodies are defending the public, but had restrictions been lighter, would HSBC have had more creative solutions for its customers, such as embedding personalised, data-first lending?

Banks have been fearful of exploring innovative embedded lending solutions, as they were 15% more likely to receive formal enforcement action. However, in August 2024, HSBC decided the benefits were worth the compliance battle.

While some argue that regulation can hinder innovation — with companies hesitant to invest in operations due to increased oversight — others state ...