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Regulatory fees do not constitute obstacles for new providers in the financial sector

22-12-2017

Regulatory fees do not have any effect on the entry or growth of new providers in the financial sector, the so-called ‘fintechs’. More critical questions are whether or not these new providers are able to find highly-qualified staff, and whether there is sufficient demand for their products. These have been some of the findings of a study that consultancy firm EY carried out by order of the Netherlands Authority for Consumers and Markets (ACM). Based on this study, ACM does not see any reason to conduct a further study into regulatory fees.

Smaller market participants pay relatively more regulatory fees

The Dutch Authority for the Financial Markets (AFM) and the Dutch central bank (DNB) are responsible for oversight of the financial sector. Market participants must pay a fee for this oversight. Some of the newer market participants had indicated to ACM that they believed the regulatory fees that AFM and DNB charged were too high. According to the study, smaller fintech companies do pay relatively more than the larger firms, but this discrepancy does not represent an obstacle for their investment decisions. A similar pattern can be observed in other European countries, too.

Study into obstacles

ACM is currently conducting a study into the obstacles that fintechs encounter when entering the financial sector. To ACM, it is important that fintechs do not face any unnecessary obstacles, thereby creating opportunities for increased competition and more innovation. ACM had previously published a study with recommendations aimed at preventing fintechs from becoming excluded on the payment market by banks.

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