Hi everyone! A couple of weeks ago, I had the chance to meet a bunch of people and companies in the UK (thanks to everyone that made connections over Twitter too) and I learned quite a bit about how different the fintech landscape is compared to the US. One of the more amusing discoveries was regulatory related - after commenting at a happy hour that there were a ton of London Tube and bus advertisements from fintech companies focused on the SME space, I learned about RBS' Remedies Fund competition that just recently closed (link).
TLDR - As part of conditions attached to the £45bn government bailout of the Royal Bank of Scotland during the 2008 crisis, RBS initially attempted to sell and spin off a portion of its SME banking business. However, plans soon fell through and an alternative agreement was put into place where RBS would contribute £775m into an Remedies Fund that would be administered by a body that's independent from the government and RBS. £425m were given out as award to help challenger banks developer their own offerings while the other £350m was put into an incentivized switching scheme to try and get up to 200k RBS business clients to switch their accounts.
On 2.2.19 - it was announced that Metro Bank, Starling, and Clearbank won the initial first three grants (£120m, £100m ,£60m respectively) while the rest of the funds were dolled out in themed pools to variety of fintech companies, with the final pool prize winners to be announced on August 19th. For all intents and purposes, these prizes represent effectively "free cash" as their is no equity or repayment terms associated (to my knowledge).
Regulators in the UK and EU seem very much incentivized to increase competition in financial services, but it seems a bit similar to the US where while they're not afraid to jump in and shake things up, details on exact technical execution start to get a bit fuzzier when deadlines approach. Putting Brexit aside, when it comes to building across the EU + UK, each market is extremely different across a wide variety of factors and does require somewhat localized approaches to each. Nevertheless, this does imply that there's ample opportunity for companies that can figure out how to effectively navigate through each market and create seamless, unified experiences, particular for B2B.
In other news - I'll probably be moving my newsletter over to substack in the next few weeks in an attempt to pressure myself to blog a bit more :) - look out in your inbox for a new one soon! I'll leave you all with a great tweet on fintech by A16Z's newest partner below.