Fintech in Belgium - A country with unexplored potential

Belgium is unfortunately not (yet) a hot spot of Fintech in the world. Contrary to our surrounding countries from which several Fintech Unicorns have emerged (e.g. Qonto, Alan or SpenDesk in France, Revolut, Monzo and Starling Bank in the UK, Mollie, Adyen and Bunq in the Netherlands or Trade Republic, N26 and Solarisbank in Germany), Belgium unfortunately doesn’t have a pure Fintech unicorn yet.
This is unfortunate, as such unicorns often form a source of inspiration and a pool of money and people, which result in interesting new Fintech start-ups.

Belgium does however have some unicorns, which have a strong link with the financial services industry, i.e. Collibra (data governance, for which the financial sector is one of their primary targets), Odoo (a platform for business apps with strong financial integrations), Deliverect (integration of online food orders into restaurant’s POS systems) and team.blue (provider of internet services), but no pure Fintech player.

It’s a pity that Belgium is not more dominant on the Fintech map, as it has a lot of strengths to bring to the table:

• First of all there is the location. Located centrally in Western Europe and having a dense road, railway and airport infrastructure, it allows to connect to the rest of Europe and the rest of the World in a very easy way.

• Belgium is part of the European Union and the Euro zone, meaning international expansion to other Euro countries is a lot easier, as most financial directives applicable in Belgium, also apply in other European countries and National Bank (financial) licenses can be easily passported to other European countries.

• There is of course also the presence of the European headquarters and several other international institutions (like e.g. the NATO). This give a close proximity to the instances discussing the financial directives of tomorrow and it also gives access to a pool of international, highly qualified resources.

• Belgium has a long successful history of banking and insuring, which resulted in several leading (historical) players having their international or European headquarters in Belgium, e.g. SWIFT, Euroclear, Bank of New York Mellon and MasterCard. Historically Belgium has been a pioneer in the financial services industry, with systems like Proton (a digital wallet on your bank card), Payconiq (a QR-based payment system) or Isabel (a multi-bank system for companies to access bank their accounts from different banks in 1 platform) launched years ahead of similar initiatives in other countries. Additionally some successful Fintech avant-la-lettre like Clear2Pay, Unified Post or Isabel Group originated from Belgium.

• It is also the home to some of the most innovative banks in the world, like KBC and Belfius, which rank both in the top 5 of having the best mobile apps (according to several studies), surpassing multiple well respected neobanks. These banks not only offer all the innovative features for which neobanks became famous (like digital onboarding, PFM features, account aggregation, deals in the forms of cashbacks and other promos…​), but have gone even a step further. E.g. KBC offers access to a large amount of third-party services in their app (like mobility and government services, but also the possibility to reserve a restaurant or even a service called Goal Alert, which notifies customers via the KBC app, when a soccer highlight occurs) and aims to become a sort of super-app in Belgium.

• The availability of highly skilled resources, thanks to this historical presence of large financial players in Belgium and the high-quality educational system. The Belgian universities form hundreds of excellent (software) engineers, mathematicians, economists…​ who are immediately deployable in the Fintech industry and are often multi-lingual (with good knowledge of English).

• And finally the existing large players have a number of Fintech start-up accelerators and programs and Fintech labs, which are a great source of innovation. E.g. KBC StartIt program, Belfius Studio or different innovation programs of MasterCard (like the StartPath-programme or Mastercard Fintech Express programme).

Unfortunately all those strengths don’t sufficiently compensate for the deficits of the Belgian market.

• First of all Belgium lacks somewhat the entrepreneurial climate that matches the Fintech sector, i.e. the Fintech sector is a world of fast and aggressive growth, which matches difficult with the Belgian entrepreneurial culture, which is more conservative and slow growing (hence also the reason of a large number of very successful historical SMEs in Belgium). Additionally the general mentality in Belgium towards entrepreneurs can be quite negative.

• Linked to that first point, there is also a lack of VC funds, especially for early - more risky - (seed) rounds. There are some VCs active in the field, e.g. SmartFin Capital (Jurgen Ingels), Pamica (Michel Akkermans), Hummingbird Ventures, Volta Ventures, Fortino…​ and also some government-supported investment vehicles like PMV, FPIM, GIMV, GIMB or Sambrinvest, but those are considerably smaller and less focused on Fintech than VCs in other countries.

• The small size and complexity of the market. A Belgian Fintech has only access to a market of 11 million consumers and immediately has to deal with a lot of complexity, i.e. supporting 3 or even 4 languages (Dutch, French, German and English), cope with the regional (Flanders, Brussels and Wallonia) differences in regulation and culture/habits and needs to convince a market which is quite conservative in the adoption of new technologies.

• The complex structure and bureaucratic processes of Belgium, consisting of 3 regions, 3 communities and a federal government, makes it hard to cope with all regulations and to find your way through the web of administration. This division of responsibilities over different government levels (e.g. fiscal regulation is a federal responsibility, while regulation and subsidies for boosting employment and innovation is at regional level) makes it also very hard to come with an englobing "master" plan to boost the Fintech sector (like e.g. the successful initiative of president Macron in France to boost the Fintech sector).

• Even in a small country like Belgium, different hubs - often linked to (competing) universities (i.e. mainly Brussels, Antwerp, Ghent, Louvain and Louvain-La-Neuve) compete with each other, instead of working together to put Belgium on the Fintech map.

• Belgium has also a quite conservative and risk-reluctant regulator, which makes it hard for Fintechs (coming with new ideas) to obtain their licenses and get a fair level playing field. Additionally the Belgian regulator has its hands full with the regulation of all big historical financial institutions (of which there are a lot compared to the size of Belgium). As a result, the regulator is more a blocking than a stimulating factor. This contrary to countries like the UK and Lithuania, where the regulators have been stimulating innovation in Fintech.

• The Belgian market is difficult to disrupt, as it already has a very high quality of banking services. The low market penetration of successful neobanks (like N26, Revolut, Bunq…​) on the Belgian market is the best of proof of this. Even initiatives focused primarily on Belgium, like NewB (although not positioned as a Neobank, but more as a cooperative, ethical and sustainable bank), Banx (the Belfius-Proximus initiative) and Aion have difficulties to get a substantial market share.

• And finally the disproportional large number of strong incumbent players tend to attract a lot of talent and often block entrepreneurship (not necessarily deliberately, but if resources are able to do interesting projects at large institutions, they might not be inclined to create or join a start-up or scale-up).

Despite all this, Belgium is definitely not a green field on Fintech companies either. Quite some Fintech players are very successful both in Belgium and abroad and have enormous potential to grow even further.

First of all, there are some historical (avant-la-lettre) Fintech players, like Isabel Group, Bancontact, Ogone (now Wordline-Ingenico), Clear2Pay (now FIS), Unified Post, Buy Way, Callatay & Wouter (now SOPRA Banking Group)…​
Additionally Belgium has a rich history of strong (consulting) service providers in the financial services sector, like e.g. Capco (now part of Wipro), Projective, DynaFin or Kronos group.

But there is also a whole list of Belgian Fintechs created in the last decade such as

• PayTech: Fintechs simplifying national and international payments, e.g.

  • Bancontact Payconiq : leader of payment services in Belgium, with the Bancontact payment scheme and mobile payment app Payconiq. The company is also on the short-list of the EU to be positioned as a European payment alternative for VISA and MasterCard.

  • Bonsai: a mobile payment solution designed for local shoppers

  • iBanFirst: facilitate B2B payments across numerous currencies

  • Digiteal: invoicing and payment solutions for businesses

  • Moneytrans: sending money online for migrants

  • Monizze: (social) voucher solutions

  • POM: e-invoicing and e-payment technology solutions

  • Twikey: enabling simple and accessible SEPA direct debits through e-Mandates

• WealthTech: Fintechs provides services to improve investing and asset management:

  • Abbove (formerly PaxFamilia): digital wealth management platform for financial advisors

  • Blanco: a software solution for asset managers

  • Curvo: an investment app designed for easy index investing

  • Gambit Financial: digital investment solutions

  • InvestSuite: an AI-based investment management applications

• RegTech: audit, compliance and risk management solutions, financial data management and identity management:

  • b.fine: industrialize the regulatory reporting for financial institutions

  • Complidata: Trade Finance Risk Monitoring, AML Optimisation and Corporate KYC Automation

  • Discai: commercialisation of the AI applications built internally for KBC

  • Harmoney : digital platform for complex onboarding and compliance processes

  • itsme: a digital identity system

  • RiskConcile: risk and compliance technological solutions, with a focus on asset managers.

• LendingTech: Fintechs offering solutions for lending and financing:

  • Edebex: customer invoices marketplace that allow businesses to sell their invoices to investors

  • Koalaboox: small business management and financing solutions

  • Oper: solutions to digitize mortgage offerings

• Personal and Business Financial Management (PFM and BFM): Fintechs offering solution to get more insights in your personal and business finances and to optimize your budget management

  • Accountable.eu: financial companion of today’s self-employed worker)

  • Cake: offering market insights and cashback campaigns based on financial data

  • Cashforce: solutions to help cash forecasting

  • Recovr: automatic collection of unpaid invoices

• InsurTech: Fintechs offering innovation in the insurance sector

  • Qover: innovative digital insurance solutions

  • Yago: digital insurance broker

• Blockchain and Crypto: Fintechs offering solutions based on blockchain and crypto technologies:

  • Arkane Network: a software platform which allows to convert traditional coding to the blockchain

  • Bit4You: crypto exchange platform

  • Elyps: investment funds specialised in digital assets and blockchain tech

  • Keyrock: cryptocurrency market maker

  • Ngrave: offering a cryptosecurity solution, i.e. hardware wallet to store your crypto-tokens

  • Sofitto: decentralizes payment systems and digitizes cash

and of course we shouldn’t forget the tech companies active in adjacent services, which have a strong link with financial services and thus Fintech, e.g.

• Accounting, with companies like Silverfin, EMASphere, OkiOki, Yuki…​

• HR Tech firms with strong link to financial services, like salary management, extra-legal benefits or expense management, e.g. Officient, Payflip, Rydoo, MobileXpense…​

• Document management and digital process automation with companies like Doccle, Unified Post, Docbyte, Penbox or Metamaze

• Real Estate Tech with tech companies like Rock.Estate or Setle, but also presented in partnerships between Belfius and Immmovlan or KBC and Immoscoop and in the form of platforms to manage co-working places, like d.work, Frame21, SpareSpace, Bar D’Office, Deskalot…​

• FoodTech with companies like Deliverect, APICBASE, Youmeal or Growzer

• Mobility Tech with a whole variety, i.e. from MaaS providers (like Skipr, Olympus, Vaigo, Moveasy or Modalizy), to mobility managers (like Mbrella) or new car leasing and sharing companies (like Lizy, Cambio, Poppy or Partago) all the way to a whole range of bike leasing companies, like Ubike, Cyclis, B2Bike, O2O, Lease a bike…​

As you can read, there is a lot of potential in the Belgian market, if all noses are put in the same direction. Let’s hope we can soon welcome our first pure Fintech unicorns.