FECIF Deputy Chairman
Did we become hostages to ever-increasing regulation?
According to most common sources, Stockholm syndrome is a type of psychological bond between hostage and their hijacker, when the former develops emotional ties to a person that beats, abuses or generally hurts him or her. Plainly sad, it is about getting pathological “feeling” for your abuser. You might be interested as to how this phenomenon could possibly connect to financial advice and our industry in general? Well, I am afraid I can show you.
With the strong influx of Fintech projects in the financial industry, traditional players are under notable pressure. Most of them have quickly become worried that many of the Fintechs are building their competitive advantage on bypassing (i.e. ignoring) extensive regulation covering financial services. So far, so good. Logical reaction. But I became quickly agitated, when – to my surprise – the traditional players started screaming: “This is unfair, we want the same regulation for Fintechs as we have.” Bah! The same people that I regularly heard talking about obvious over-regulation of financial services are demanding higher regulation for some? This feels truly irrational to me.
It is obvious that we want the same rules to stand for everyone. But should we indirectly appraise our current rules, this over-regulation behemoth of MiFIDs, IDDs or GDPRs? Hell no! We, as a crucial part of the financial industry, should in the first place ask for a reduction of our regulation to meet the liberal environment our Fintech counterparts enjoy; not ask for the absurdly bureaucratic regulation to be spread everywhere and therefore implicitly confirmed correct.
Over time, our industry has clearly developed Stockholm syndrome with its captor – the ever-present bureaucrat and regulator of everything from Brussels. We probably cannot live without the burden forced onto us, hence we force it onto others as well. You say it is not so? Then we have to fundamentally change our approach and request the demolition of the absurd regulation in the first place. A level playing field with Fintechs lies in the liberal market, not the over-regulated one!
Of course, for some the protection of high barriers to entry might be convenient. But it is a protection that Fintechs have shown us is illusionary. This is not meant negatively towards Fintechs, it is solely our problem. A free market and limited regulation; that is what we should stand for. For our business, industry and, finally, our customers.