Why Belgium Can Be A Good ‘Test Market’ For FinTech Firms

Belgium, which is home to many European Union (EU) institutions, is also a burgeoning FinTech hub. The country has the fifth-highest number of FinTech deals in Europe, according to an analysis from Belgium-based European FinTech platform B-Hive.

The average FinTech deal size in the region is doubling, but B-Hive noted a decrease in the number of deals. At the same time, blockchain, artificial intelligence (AI) and data analytics are seeing a particularly high amount of activity. The report also noted that “most [FinTech firms] are still in the inception process with seed funding from mainly Belgian investors as the prime source of financing.”

FinTech firm recovr, which is supported by the KBC Start-it accelerator, is among the startups based in Belgium. The company offers credit management software that helps companies with the debt collection process. Alessandro Drappa, the firm’s co-founder, noted that Belgium offers “good opportunities in a context, with high R&D spending for all sectors and a steady development of [Information and Communication Technology (ICT)] talent over the last 5 years,” Drappa told PYMNTS in an interview, adding that the country attracts talented workers because of its location at the center of Europe and the presence of EU institutions.

On another note, Drappa said FinTech firms that offer their products in Belgium have to adapt to three languages: French, Dutch and German. While this necessity can be seen as a challenge, Drappa also sees it as an opportunity.

“It is a very good test market,” Drappa said. “The market being small, you can test your product on different population[s] with reduced marketing fees.” At the same time, he noted that internet and mobile financial service adoption “is picking up fast.”

Large multinational companies see opportunity in the city: Oracle has picked Brussels to bring its FinTech Innovation Program to the continent, the company announced in June. With the program, Oracle plans to dedicate additional European staff and resources to monetizable relationships with digital banking innovators and FinTech firms.

Oracle chose the city due its central location and presence of EU institutions. Rik De Deyn, senior director of banking innovation at Oracle, said in the announcement that “Brussels is easy to reach from most European financial hubs, close to the European Commission and an ideal location to bring together FinTech innovators and financial institutions.”

The move was welcomed by Belgium Minister of Finance Johan Van Overtveldt, who said that he expects the relationship to “create real momentum in the acceleration of financial innovation in Belgium and Europe.”