Eric Van der Kleij Banking on Transformation

Dutch fintech guru Eric Van der Kleij told Handelsblatt Global what's ahead for Britain's financial sector after Brexit, the possibilities of cooperating with Switzerland and how soon, borrowers may be able to get loans from their local supermarkets.
Quelle: Bloomberg
Come Brexit, will there be a Swiss-Brit switcheroo around the corner?

Days after world leaders convened in Davos at the World Economic Forum, Switzerland’s tech elite met in Zurich to discuss the digital transformation of business. One speaker was Eric Van der Kleij, a Dutch financial technology expert who advised the U.K. government on setting up London’s tech scene. From 2012 to 2016 Mr. Van der Kleij was head of Level39, Europe’s largest fintech accelerator.

He is now a special adviser to Kickstart, the Swiss accelerator. In an interview with Handelsblatt Global, Mr. Van der Kleij said Britain’s decision to leave the European Union has accelerated talk of a possible financial sector alliance between Switzerland and the U.K.

Handelsblatt Global: Will there be banks in five to ten years in London and the rest of Europe?

Eric Van der Kleij: Oh yes there will be, but they may look very different. You should never underestimate the insights that banks are having at the moment. They are very aware of how difficult their future could be if they don’t transform. And almost all of them are very active with more than just window dressing marketing exercises. They’re figuring out what the next step is for them. I wonder if the word bank itself is what we’ll use to describe it in the future.

What are the main challenges?

All of the biggest ones have the problem of legacy. Almost all of them have generations of 40 or 50 different (IT) systems to manage and to support. And that’s the thing that’s difficult for them. They have to continue to support the legacy, while figuring out the new. They get access to innovation by doing proof of concept with startups. And those are the start-ups who want to sell to the banks to help them to be more sufficient, more transparent. And you have the more disruptive companies for example like TransferWise in London. They are very clear. They want to be regarded as a completely separate new financial services player.

What impact will Brexit have on London as a place for financial technology startups?

It’s too early to say what the true impact will be. But one thing is not going to go away. It’s the size of the U.K. market. Most of Europe will want to continue to access the size of the U.K. financial services market. Not just the financial services market, but the U.K. as a customer market. It has the largest e-commerce market per capita. It has one of the biggest creative industries as well. As the Brexit discussions continue, and as other countries start making their decision about what to do in the future, you’ll see more continental European countries demanding continued access to the U.K. market. Because that’s not going to disappear over night.

Are you worried about banks moving away? UBS recently moved some of its businesses to Frankfurt.

You always have people looking for reasons to implement things they were thinking about anyway. So that’s the change that everybody has to look at and embrace. But one thing is for sure. In London and the U.K. as a whole, we’ll continue to make sure that London is equally competitive. But actually there is a different type of strategy, I think is interesting, especially for countries like Switzerland and the U.K.. It’s the idea of the (two markets) “combined.” There’s continued stability between the two countries. If the combined financial services of the U.K. and Switzerland collaborate, they make quite an interesting, powerful force to partner with and to do business with in Europe.

So they form their own union?

I wouldn’t suggest that. But I think, there’s no question about stability between the two countries, and so we can certainly do much more business between the two.

What are your impressions of how the U.K. government is proceeding with Brexit?

I think the U.K. government is taking a very proactive approach getting on with the job. There is not procrastination here and that’s the most important thing. As a citizen, I’m pleased to see that nobody is putting off doing that job, because that will get us to certainty again much sooner. It’s interesting that the U.K. has a new trade target. It’s 1 trillion. How do we achieve that? It’s by being more proactive about helping U.K. companies sell globally. [Editor’s Note: The U.K. Trade & Investment agency supports increasing the value of U.K. exports to 1 trillion pounds, boosting the value of foreign direct investment stock to 1.5 trillion pounds, and the number of U.K. exporters to 288,000 by 2020.]

What are you impressions of the German start-up scene?

I think that consumer lending in the DACH region as a whole is an incredibly powerful market moving force that I would back.

Why?

The opportunity for choice about what you pay, who you pay it with and taking a loan from perhaps an affinity group, somebody who cares about you – maybe it’s the supermarket? This is very interesting. Where does our loyalty lie in the future? And because it’s a well-known and measurable market that’s understandable and currently produces a lot of profit for the people that own that market, it’s ready for a little bit of disruption, both internally and externally.

Mr. Van der Kleij, Thank you for your time.

 

Franziska Scheven is a Switzerland-based journalist who writes about companies and markets. To contact the author: [email protected]