Is London’s place as Europe’s financial capital in jeopardy?
Is London’s time as the financial center of Europe at an end? This is what many, including one of the UK’s biggest banks, NatWest, are saying. The bank’s chairman Howard Davies believes that Brexit will cut off Britain from the EU in more ways than previously thought, and as a result, leave London lagging as the financial hub of Europe.
This is coupled with the recent move of investment professionals out of the city and into other localities throughout Europe. Deutsche Bank has already announced that it will relocate 100 banking jobs outside of London and other cities.
Facebook faces EU-to-US data transfer ban
These days the European Union and the United States have different data privacy policies. The transfer of personal data between the two regions has come into question, especially as it relates to transfers within the same company. This came to a head in May, with Facebook facing a potential ban on data transfers of data originating from Europe to the US.
The argument from the opposition is that Facebook is sending EU citizen data to the US, where it could be compromised or used for nefarious activities. Facebook will likely appeal the decision, so the ruling is not by any means final, but if upheld, this could have massive implications for the high-tech industry.
Austrian privacy activist Max Schrems highlighted what this means for Facebook:
“In reality, Facebook would have to ‘split’ its service into a European and a U.S. service…The absolutely ‘necessary’ transfers (e.g., when a U.S. user sends a message to an EU user) can still happen between these two systems. The rest needs to stay in Europe (or in another safe country). Obviously, Facebook will do everything to avoid that.”
ECB is wary of post-Covid relief economy
The European Central Bank expressed its concern over the future of the region’s economy, especially after economic stimulus measures expire later this year. The ECB has managed to weather the coronavirus storm through a variety of stimulus measures. While they are unlikely to inject even more capital into the region, they warn the recovery could be uneven throughout Europe.
The ECB noted in a statement:
“As this support is gradually removed, considerably higher insolvency rates than before the pandemic cannot be ruled out, especially in certain euro area countries.”
On June 10th, the ECB will have an important meeting that could play a vital role in what the central bank decides to do in its post-covid policies. Some bankers believe that the ECB may continue to provide stimulus to the region’s economy if it appears recovery growths are stalling.
Zeta gets $250 million from Softbank
The latest fintech unicorn raised its Series C round led by SoftBank Vision Fund 2, valuing the company at $1.45 billion. Zeta helps banks and other financial institutions that don’t have technical expertise build technology-based apps and services.
The company’s co-founder Bhavin Turakhia sees this as a way to bring critical financial institutions into the 21st-century:
“Banks are still stuck in the ’80s. Many of them still use COBOL programming language. They offer poor user experience…Nobody thought of building the bank stack from the ground up. Until now.”
The company, based out of India, became the 14th Indian tech unicorn this year alone.
And that’s it for the fintech news highlights. Check out more relevant articles below: