Why collaboration is key to evolve Europe into global technology leader

Following a monumental 2021 for European technology – in which the region’s start-up scene raised a record-breaking €100,1 billion in funding and grew faster than those in China and the US – the momentum has continued in the first quarter of 2022. Over €27,5 billion was raised in the first quarter of the year – a rise of over 25% from Q1 2021 – with the UK, France, and Ireland standing out for year-on-year growth.  

For Europe, these are positive steps towards its ambition for the year: to consolidate itself as a global technology leader. As the region’s promise continues to rise – and financial backing follows suit – the challenge facing the region is to show maturity and demonstrate why it must be spoken about alongside its global counterparts.

This will only prove possible via collaboration that transcends industrial and international borders, an ethos which lies at the core of our approach towards tech at Mastercard.

Facilitating next-gen payments through partnership

Few can contest that fintechs have dominated the tech start-up sector in recent years. Last year European fintechs raised more than the continent’s whole tech scene did in any year up until 2018. In Q1 this year, the amount raised by fintechs (€7,97 billion) was more than €5 billion higher than the next highest sector, healthcare. Fintechs are running their own race.

Yet – while a positive indication of investor confidence in the region’s fintechs – Europe still homes only 7.2% of the world’s fintech unicorns. We must continue to work cohesively to drive world-class innovation and develop a regional voice that can lead the fintech sector on a global level.

We appreciate our role as a leader in making this a reality and are proud to be a uniting force between the new and established players in the European fintech scene. Through the power of partnership, we continue evolving our support portfolio to drive trust, innovation, and inclusion that will form the bedrock of Europe’s global fintech status for years to come.

We have recently launched Mastercard Developers – a portfolio of solutions, programs and insights – to enable European fintechs to build, launch and grow in a collaborative environment. It marks our technology-led and developer-centric approach to partnerships in the space and goes beyond end-user fintech, given the growth of enablers in recent years.

This new platform builds on the ongoing commitment we made with Fintech Express – our programme designed to facilitate the launch of emerging fintechs through partnership – in 2021. We welcomed B4B Payments, CleverCards, and HUBUC as strategic partners to the Fintech Express last year and will continue to expand the programme under the umbrella of Mastercard Developers in 2022.

Progressing open banking to empower consumers with their data

Businesses and consumers continue to expect more choice in how they make transactions, store value, and use their data. This, among other reasons, has contributed to the development of open banking into a global phenomenon. Considered a solution born in Europe – more specifically from the EU’s PSD2 regulation – the evolution of open banking is driven by the continent’s leadership. 

In 2021, European adoption of open banking accelerated at an exceptional pace. Our open banking tracker for Europe – produced in in collaboration with Konsentus – revealed that the total number of third-party providers at the end of 2021 was 529, an overall increase of 79 representing a 17.5% year-on-year increase. There is notable momentum in Lithuania, which is now the country with the fifth highest number of home third-party registrations (26) behind the UK, Germany, Sweden, and France.

Our ‘Open Banking Readiness Index: The Future of Open Banking in Europe’ report – released in June 2021 – also shone a light on the Nordics, with Denmark, Norway and Sweden named as the countries best-placed to take advantage of open banking technology in the near future. This performance owed largely to the pan-Nordic collaborative models and P27 initiative that will aid the region’s open banking readiness.

Denmark was also the home of one of our most significant open banking acquisitions to-date – leading open banking platform Aiia – that will anchor our European open banking efforts and enable us to provide businesses and consumers with the option to use their own data simply, securely and quickly.

Supporting the digital journey for Europe’s SMEs

Finally, it would be remiss to bypass the historic digital journey embarked on by Europe’s SMEs over the course of the last two years. SMEs remain the backbone of the region’s economy, representing 99% of all business in the EU, accounting for over half of its GDP, and employing around 100 million people, according to the European Commission.   

As such, the resilience and adaptability of SMEs in the transition to digital is of existential importance to Europe. Global organisations, such as ours, hold a responsibility to help SMEs navigate this journey throughout ongoing economic turbulence that has already pushed many small businesses to the brink.

Recognising this, we continue to invest in solutions to help European SMEs transform digitally with the view to supporting the wider regional ecosystem. We launched our global small business initiative – Strive – last year and committed to supporting five million SMEs on their digitisation journey. The launch of Strive – that will initially focus on France, Spain, and the UK in Europe – came with the goal of bringing 1 billion people and 50 million micro and small businesses into the digital economy by 2025.

As European technology continues to evolve at pace, it is important that organisations big and small collaborate to build a network to drive innovation and progress. I’m proud of the work we have done to-date to foster new partnerships and support Europe’s brightest minds to turn bold ideas into realities. We are all excited to see what comes next and will continue to offer more choice to our customers and shape an inclusive, sustainable, and secure future for European payments.