FinTech:

European
Union
Perspective
MIRJANA PEJIC-BACH

UNIVERSTIY OF ZAGREB

FA C U LT Y O F E C O N O M I C S A N D
BUSINESS

D E PA R T M E N T O F I N F O R M AT I C S

Università degli Studi di Milano

Goals of the talk
RQ1: What are Commission’s actions regarding Fintech at the EU
and national levels?
RQ2: How these actions are transfered to EU funded projects?
RQ3: What is the focus of Fintech contemporary research and how
EU initiatives are related to it?
RQ1: What are
Commission’s actions
regarding Fintech at the EU
and national levels?
How EU defines Fintech? (1/2)
FinTech is the term used to describe the impact of new technologies on the financial services
industry. It includes a variety of products, applications, processes and business models that
have transformed the traditional way of providing banking and financial services.

 While technological innovation in finance is not new, investment in new technologies has
substantially increased in recent years and the pace of innovation is exponential.
 We now interact with our bank using mobile technology.
 We make payments, transfer money and make investments using a variety of new tools that
were not there few years ago.

https://ec.europa.eu/info/business-economy-euro/banking-and-finance/fintech_en
How EU defines Fintech? (2/2)
Artificial intelligence, social networks, machine learning, mobile applications, distributed ledger
technology, cloud computing and big data analytics have given rise to new services and business
models by established financial institutions and new market entrants.
All these technologies can benefit both consumers and companies by enabling greater access to
financial services, offering wider choice and increasing efficiency of operations. They can also
contribute to bringing down national barriers and spurring competition in areas such as
 online banking, online payment and transfer services
 peer-to-peer lending
 personal investment advice and services
Fintech is a rapidly growing sector: in the first half of 2018, investment in fintech companies in
Europe alone reached US$26 billion

https://ec.europa.eu/info/business-economy-euro/banking-and-finance/fintech_en
Commission's action plan on FinTech (1/2)
In March 2018 the European Commission adopted an action plan on FinTech to foster a more
competitive and innovative European financial sector. The action plan sets out 19 steps that
the Commission intends to take to
 enable innovative business models to scale up at EU level
 support the uptake of new technologies such as blockchain, artificial intelligence and cloud
services in the financial sector
 increase cybersecurity and the integrity of the financial system

https://ec.europa.eu/info/business-economy-euro/banking-and-finance/fintech_en
Commission's action plan on FinTech (2/2)
These initiatives mainly aim to enhance supervisory convergence toward technological
innovation and prepare the EU financial sector to better embrace the opportunities brought by
new technologies.
This should enable innovative FinTech solutions to be rapidly rolled out across the EU and
benefit from the scale economies of the single market, while preserving financial stability and
ensuring consumer protection.
The action plan is part of the European Commission's efforts to build a Capital markets
union and a true single market for consumer financial services. It is also part of its drive for
a Digital single market.

https://ec.europa.eu/info/business-economy-euro/banking-and-finance/fintech_en
FinTech action plan: For a more competitive
and innovative European financial sector
 Europe's financial markets will be more integrated, safer and easier to access thanks to steps mapped out
by the Commission in its FinTech action plan.
 The plan will help the financial industry make use of the rapid advances in technology such as blockchain
and other IT applications and strengthen cyber resilience.
 This will benefit consumers, investors, banks and new market players.

https://ec.europa.eu/info/sites/info/files/180308-action-plan-fintech-factsheet_en.pdf
The most important steps
 The Commission hosts EU FinTech Laboratory where European and national
authorities will engage with tech providers in a neutral, non-commercial
space;
 The Commission has already created an EU Blockchain Observatory and
Forum. It reports on the challenges and opportunities of crypto assets later in
2018 and is working on a comprehensive strategy on distributed ledger
technology and blockchain addressing all sectors of the economy. A
distributed ledger is an information database that is shared across a network.
The best-known type of distributed ledger is blockchain.

https://ec.europa.eu/info/business-economy-euro/banking-and-finance/fintech_en
The most important steps
 The Commission consulted on how best to promote the digitisation of information published
by listed companies in Europe, including by using innovative technologies to interconnect
national databases. This will give investors far easier access to key information to inform their
investment decisions.
 The Commission will run workshops to improve information-sharing when it comes
to cybersecurity;
 The Commission will present a blueprint with best practices on regulatory sandboxes, based
on guidance from European Supervisory Authorities. A regulatory sandbox is a framework set
up by regulators that allows FinTech startups and other innovators to conduct live
experiments in a controlled environment, under a regulator's supervision. Regulatory
sandboxes are gaining popularity, mostly in developed financial markets.

https://ec.europa.eu/info/business-economy-euro/banking-and-finance/fintech_en
 Overview

https://ec.europa.eu/info/sites/info/files/180308-action-plan-fintech-factsheet_en.pdf
 SUPPORT ENCOURAGE
UPTAKE OF INNOVATIVE
NEW BUSINESS
TECHNOLOGIES MODELS

STRONGER CYBER
RESILIENCE
 Current steps

https://ec.europa.eu/info/business-economy-euro/banking-and-finance/fintech_en
 Current steps

https://ec.europa.eu/info/business-economy-euro/banking-and-finance/fintech_en
RQ2: How these actions
are transfered to EU
funded projects?
Methodology
Search CORDIS database
of EU projects with
keyword fintech
28 projects
25 closely related to
Fintech

https://cordis.europa.eu/projects/en
Programmes
 FP5-IST - Programme for research, technological development and demonstration on a "User-friendly
information society, 1998-2002„ – 1 project
 H2020-EU.1.2.1. - FET Open – 2 projects
 HORIZON 2020 - (1.3.1.) EXCELLENT SCIENCE - MARIE SKŁODOWSKA-CURIE ACTIONS – ITN – 1 project
 H2020-EU.1.3.3. - Stimulating innovation by means of cross-fertilisation of knowledge – 1 project
 H2020-EU.2.1.1. - INDUSTRIAL LEADERSHIP - Leadership in enabling and industrial technologies – 7
projects
 H2020-EU.2.3.2.2. - Enhancing the innovation capacity of SMEs – 3 projects
 H2020-EU.3. - PRIORITY 'Societal challenges – 6 projects
 H2020-EU.3.7.4. - Improve cyber security – 1 project
 H2020-EU.3.7.6. - Ensure privacy and freedom – 3 projects
FP5-IST - Programme for research, technological
development and demonstration on a "User-friendly
information society, 1998-2002"

ENCOURAGE INNOVATIVE BUSINESS MODELS

H2020-EU.1.2.1. - FET Open
STRONGER CYBER RESILIENCE

SUPPORT UPTAKE OF NEW TECHNOLOGIES

HORIZON 2020 - (1.3.1.) EXCELLENT SCIENCE -
MARIE SKŁODOWSKA-CURIE ACTIONS

ENCOURAGE INNOVATIVE BUSINESS MODELS

H2020-EU.1.3.3. - Stimulating innovation by
means of cross-fertilisation of knowledge

ENCOURAGE INNOVATIVE BUSINESS MODELS

H2020-EU.2.1.1. - INDUSTRIAL LEADERSHIP -
Leadership in enabling and industrial technologies

ENCOURAGE INNOVATIVE BUSINESS MODELS

SUPPORT UPTAKE OF NEW TECHNOLOGIES

H2020-EU.2.1.1. - INDUSTRIAL LEADERSHIP - Leadership in
enabling and industrial technologies

ENCOURAGE INNOVATIVE BUSINESS MODELS

SUPPORT UPTAKE OF NEW TECHNOLOGIES

H2020-EU.2.1.1. - INDUSTRIAL LEADERSHIP -
Leadership in enabling and industrial technologies

SUPPORT UPTAKE OF NEW TECHNOLOGIES

H2020-EU.2.3.2.2. - Enhancing the
innovation capacity of SMEs

SUPPORT UPTAKE OF NEW TECHNOLOGIES

H2020-EU.3. - PRIORITY 'Societal
challenges
SUPPORT UPTAKE OF NEW TECHNOLOGIES

SUPPORT UPTAKE OF NEW TECHNOLOGIES

H2020-EU.3. - PRIORITY 'Societal
challenges
SUPPORT UPTAKE OF NEW TECHNOLOGIES

SUPPORT UPTAKE OF NEW TECHNOLOGIES

H2020-EU.3. - PRIORITY 'Societal
challenges
STRONGER CYBER RESILIENCE

SUPPORT UPTAKE OF NEW TECHNOLOGIES

H2020-EU.3.7.4. - Improve cyber security

STRONGER CYBER RESILIENCE

H2020-EU.3.7.6. - Ensure privacy and freedom

STRONGER CYBER RESILIENCE

 Number of funded projects
14 13
12
10
8
6 6
6
4
2
0
ENCOURAGE
SUPPORT UPTAKE OF STRONGER CYBER
INNOVATIVE BUSINESS
NEW TECHNOLOGIES RESILIENCE
MODELS
Skup1 13 6 6
RQ3: What is the focus of
Fintech contemporary
research and how EU
initiatives are related to it?
Methodology
Bibliometric analysis
• (TITLE-ABS-KEY (‘fintech’)
• 500 document results

Text mining
• Key-word extraction
• Topic mining
Bibliometric
analysis
 Number of citations of Fintech related papers

422
393

2 12 55
2015 2016 2017 2018 2019
citations 2 12 55 422 393
10 most cited papers
Text mining
Methodology
 Text mining is the process of exploring and analyzing large
amounts of unstructured text aided by software that can
identify concepts, patterns, topics, keywords and other
attributes in the data.
 1st step – word and phrases extraction – Where is the
concern?
 2nd step – topic extraction using cluster analysis – What
issues are in the focus?
Where is the focus?
Word extraction
Phrases extraction
What issues are in focus?
Topic extraction
STRONGER CYBER RESILIENCE
ENCOURAGE INNOVATIVE BUSINESS MODELS
SUPPORT UPTAKE OF NEW TECHNOLOGIES
ENCOURAGE INNOVATIVE BUSINESS MODELS
Topics of the reserch
Most of the topics are related to the
innovative business models, which
are followed by the research for
supporting uptake of new
technologies, and stronger cyber
resilience.
Conclusions
What is European success in comparison with other
countries?
https://innovation.thomsonreuters.com/en/labs/portfolio/global-fintech-rankings.html#/
https://www.jbs.cam.ac.uk/fileadmin/user_upload/research/centres/alternative-finance/downloads/2018-ccaf-global-fintech-hub-report-eng.pdf
https://www.ey.com/Publication/vwLUAssets/ey-fintech-adoption-index-2017/$FILE/ey-fintech-adoption-index-2017.pdf
All three topics are
present in EU Fintech
agenda, EU projects,
and research work.

Research is mostly SUPPORT ENCOURAGE

oriented towards the UPTAKE OF INNOVATIVE
NEW BUSINESS
encouraging
TECHNOLOGIES MODELS
innovative business
models.

On the other hand, EU

initatives are more
oriented towards to STRONGER CYBER
new technologies and RESILIENCE
cyber resilience.
EU provides
infrastrucure in terms
of new technologies
and cyber security

Although new
business models are
encouraged, they still
pose a significant
challenge both to new
entrants and to
established market
leaders.

Possible solution –
more focus to new
business models and
overall fintech
effectiveness.
Thank you!
MPEJIC@EFZG.HR