BVI survey attempts to woo cross-border fintechs

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The report, compiled by BVI Finance, the promotional body for the British Virgin Islands’ (BVI’s) financial industry, found that an overwhelming number (94%) of surveyed fintechs consider cross-border growth as critical or important to their success.

However, one in four (39%) stated that regulatory changes and compliance is a geopolitical trend having a significant impact on their business.

Furthermore, more than a quarter (28%) stated that navigating these regulatory changes is a key challenge and becomes even more burdensome when operating across multiple markets all with their own regulatory and governance requirements.

The inconsistency is creating operational inefficiencies and generating extra costs, states the report which also highlights the role that international financial centres (IFC) such as the BVI can play in attracting fintechs with international ambitions.

According to the report, almost two-thirds (63%) of the 451 surveyed firms are already operating in an IFC citing streamlined regulation as one of the main attractions.

Fintechs are also considering access to international markets when deciding on the jurisdiction in which they incorporate, as chosen by 32%.

The report comes at a critical time in terms of regulation for the fintech sector, not least because we are seeing clear differences in the approach taken by different jurisdictions. 

For example, the US has recently passed the Genius Act for the stabelcoin sector. Whereas the EU and the UK regulators have shown a preference for Central bank Digital Currencies, the current regime in the US has prioritised privately run stablecoins. 

“Fintech companies are a different generation of business – operating cross-border is a non-negotiable,” said Elise Donovan, chief executive of BVI Finance. “However, this means their models are susceptible to regulatory shifts and disparity between markets.

“Regulatory certainty is vital for fintech and crypto business growth. Predictable licensing, clear rule enforcement and cross-border recognition all enable informed long-term planning and allow these businesses to instead focus on delivering new products and services to customers as quickly as possible,” added Donovan.