The Democratisation of Finance Dilemma

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Picture this: You’re a twenty-something European who loves to travel. Your wallet is stuffed with different bank cards: a credit card for points, a debit card with 0 costs, maybe a third for when you studied abroad. Your phone has approximately seventeen different financial apps, each serving a slightly different purpose in a slightly different country. Welcome to the beautiful mess that is European fintech.

This isn’t a story about failure, though. It’s about potential, massive, continent-sized potential, that keeps bumping its head against the reality of 27 different tax codes, languages, and cultural approaches to money.

The Revolut Success Story (And Why It’s Lonely at the Top)

Let’s start with the good news: Revolut exists. And it’s genuinely European. Not European-by-acquisition like so many other “success stories,” but built from the ground up to serve people who hop between countries like they’re changing subway lines.

In my social circle, admittedly a bubble of travel-obsessed borderline millennials who consider a weekend in Barcelona perfectly normal, Revolut is the only financial app we all have in common. It’s the WhatsApp of banking: universally adopted not because it’s perfect, but because it solved a real, shared problem.

But here’s what’s wild: Revolut is basically the only example I can think of. In a continent of 750 million people, we’ve managed to create exactly one truly pan-European consumer fintech success story. That’s… not great.

[quick note: Revolut is great at exchanging money in different currencies and paying easily by card, but all the other services are pretty meh. If you want to invest, use a real broker. If you want an everyday bank account to receive your salary, use a real bank]

The Switzerland Situation: A Cautionary Tale

Saxo Bank’s recent conquest of Switzerland perfectly illustrates the European fintech paradox. They went from zero to hero in the Swiss investment market by offering something that Italians consider completely basic: free ETF saving plans.

Think about that for a second. A service that’s table stakes in Italy was revolutionary enough to dominate Switzerland. It’s like discovering that nobody in Paris has ever heard of contactless payments while Barcelona has been using them for years.

This isn’t really Saxo Bank’s fault: they identified a gap and filled it brilliantly (after a push from a local influencer, tbh). But it highlights how fragmented our continent remains. We’re not just talking about language barriers or cultural preferences. We’re talking about fundamentally different expectations for what financial services could look like.

The London-Shaped Hole in European Fintech

Brexit wasn’t just a political earthquake, it was a Euro-fintech catastrophe. London wasn’t just another financial center—it was the financial center, and crucially, it was the one that spoke English.

I know, I know. “English as the lingua franca” sounds vaguely imperialist and definitely triggers some Europeans. But here’s the uncomfortable truth: English is the only language that can realistically hold a continent-wide app together. It’s the common tongue of international business, tech, and let’s be honest internet.

London was perfectly positioned to birth European fintech champions. It had the financial expertise, ad-hoc regulatory sandboxes, the talent pool, and the linguistic advantage. Then Brexit happened, and suddenly that platform for developing continent-wide apps was… gone.

Now we’re left with Berlin and Amsterdam trying to fill that role, which is admirable but incomplete [Berlin is an inspiring, cosmopolitan, English-friendly island in a sea of increasingly irrelevant, ugly language speakers]. Scalable Capital and Trade Republic are making moves from Germany, but I genuinely don’t know how successful they are in France or Spain. That ignorance itself is telling: if they were truly dominating, I’d probably know about it. Fair to say?

The Baltic Exception (And What It Teaches Us)

Here’s where things get interesting: the peer-to-peer lending platforms from the Baltics are genuinely European products. They aren’t household names, but they’re serving customers across the continent effectively.

Why did this work? Simple: they had no choice. The Estonian domestic market has 1.3 million people. You can’t build a sustainable P2P lending platform for 1.3 million people. You have to think continental from day one.

This constraint forced innovation. These companies couldn’t rely on dominating their home market first and expanding later (the traditional tech playbook). They had to solve the hard problems of cross-border regulation, multi-currency operations (in a few cases), and diverse customer bases immediately.

It’s proof that pan-European fintech is possible. But it apparently requires your domestic market to be so small that continental expansion isn’t optional but existential.

The Tax Man Cometh (And Ruins Everything)

Which brings us to the elephant in the room: taxation. As long as every European country has its own tax code, pension systems, and investment incentives, building unified financial products remains somewhere between difficult and impossible.

A reader recently asked my opinion about an Italian competitor to Seedrs/Republic Europe (the UK-based equity crowdfunding platform). My first thought was: “Why would you use this when Seedrs exists and is better?” My second thought was: “Oh right, because dealing with tax implications as an Italian investor is a nightmare.”

Seedrs offers beautiful documentation to help UK investors claim tax exemptions on their investments. It’s a killer feature that makes the platform genuinely useful rather than just accessible. But extending this service to every European market? That’s not a product challenge, that’s an administrative and regulatory hellscape.

Well, if the country itself offers any form of tax exemptions.

Italy doesn’t even have meaningful tax incentives for venture investments. It actually disincentivizes them by making investors figure out the tax implications themselves (and requires additional paperwork above a laughable investment amount). So you end up with a choice between a superior product (Seedrs) with tax complications, or an inferior local product that at least speaks (I hope they do!) your tax authority’s language.

The Democratization Dilemma

This creates a fascinating tension around the “democratization of finance”, a phrase that gets thrown around a lot in fintech circles but rarely examined closely.

In theory, platforms that open up previously exclusive investment opportunities (like venture capital or private real estate) to regular people sound great. Who doesn’t want more financial opportunities?

In practice, it’s complicated. Traditional investment restrictions exist for reasons: some legitimate (protecting inexperienced investors), some less so (protecting established financial institutions). But when you remove these restrictions, you create a marketing problem.

Take that Italian Seedrs competitor. Italy probably have enough sophisticated, wealthy individual investors to make the platform viable. But the wealthy Italians who might be interested either already have access to these opportunities through their private bankers, or they’ve moved their investments to Anglo-Saxon platforms directly.

So the platform has to target retail investors. And Italian retail investors, frankly, don’t have massive investment capacity individually. You need a lot of them to make the unit economics work.

But here’s the catch: you can’t market to retail investors by saying, “You’ll probably lose all your money, but you’ll learn valuable lessons!” You have to sell the dream. You have to emphasize the successes and downplay the failures.

This isn’t necessarily malicious, but it is… problematic. Especially when you’re dealing with investment categories that are genuinely risky and require significant expertise to evaluate properly.

The Knowledge Gap Problem

I’ve experimented with various “democratized” investment opportunities: P2P lending, art, farmland, music royalties. The promise is always the same: access to previously exclusive asset classes with potentially good risk-adjusted and uncorrelated returns.

The reality is more complex. These opportunities often reach retail investors precisely because they’re not attractive enough for institutional money. At least the worst of the crop. There’s a reason sophisticated investors aren’t already buying up all the farmland or music royalties. It’s not because they lack access, it’s because the risk-adjusted returns often aren’t that compelling.

Angel investing is a borderline case here. Unlike public markets, early-stage investing does benefit from sector knowledge and personal connections. A software engineer investing in enterprise SaaS startups has genuine advantages over a random investor picking companies based on pitch decks.

But you can’t do angel investing part-time unless you’re restricting yourself to your exact area of expertise and have built a decent network. And even then, you’re competing against people who do this full-time with much larger portfolios and better deal flow.

The Pan-European Content Problem

The European market fragmentation creates content and marketing challenges that are almost comical. BankerOnWheel is basically the only pan-European finance content creator I can think of. Everyone else is trapped in linguistic and cultural silos.

Imagine being a fintech startup trying to market across Europe. You need different strategies for different countries, content in different languages, and relationships with different local influencers. It’s like trying to launch simultaneously in 27 different countries…because that’s literally what you’re doing.

Compare this to the US, where a single English-language marketing strategy can reach 330 million people with broadly similar cultural and regulatory contexts. The efficiencies are obvious.

The Path Forward (Maybe)

So where does this leave European fintech?

First, the problems I’ve outlined aren’t going away quickly. Tax harmonization across Europe isn’t happening anytime soon. Cultural differences in financial behavior aren’t disappearing. Language barriers remain real.

These constraints are forcing European fintech companies to solve harder problems. When Revolut built its platform, it couldn’t assume regulatory simplicity or cultural homogeneity. They had to build something robust enough to work across radically different contexts. It was more complex, but once done, it created a very reliable product.

Unfortunately, there’s a generational shift happening. Gen Z Europeans are, at least to my untrained eye, less internationally minded than my generation. This is due to the Boomer leadership and entrenched political systems that are creating more friction rather than less. Want to study abroad? Here are seventeen new forms to fill out. Thinking about working remotely from Lisbon while employed in Berlin? Good luck finding an employer who allows that. The political spectrum is almost filled, from left to right, with zero-sum devoted dudes. Instead of doing their job and finding solutions, they target foreigners as the issue and less integration as the only way out.

It’s this weird mismatch where the people who most want European integration, and who live their lives as if it already exists, are constantly bumping into systems designed by people who fundamentally don’t believe in that vision. A system designed to undermine their voice by simply not letting these people cast their vote in the place where they live.

The Brexit shock might ultimately turn into a force for innovation. With London out of the picture, multiple cities are competing to become the next European fintech capital. Amsterdam, Berlin, Paris, Dublin: they’re all making moves. Competition between cities should drive innovation and regulatory experimentation.

European fintech is stuck in a paradox: we have the scale to support massive, successful companies, but the fragmentation to prevent most of them from emerging. We’re building for 27 countries that often feel like building for none.

Here’s the thing that gets me excited about Revolut’s success: it’s proof of concept that you can build something genuinely European from day one. And that opens up possibilities we haven’t even explored yet.

Imagine more entrepreneurs looking at Europe and seeing what Revolut saw: not 27 separate tiny markets, but one massive potential customer base of 750 million people. That scale changes everything. You can afford to be honest with your users in ways that smaller, local platforms simply can’t.

Instead of the usual fintech marketing nonsense (“Get rich quick!”), you could actually level with people: “Hey, this is investing. No one’s giving you free money. Every return comes with risk attached. But here’s what we can offer that others can’t: dramatically lower costs because we’re operating at a continental scale, and access to diversification opportunities”.

The unit economics totally change when you’re targeting sophisticated users across an entire continent rather than trying to lure in every retail investor in Italy or Spain. You can focus on the people who actually want to learn, who understand that risk and return are joined at the hip, who are looking for tools rather than get-rich-quick schemes.

Revolut proved the demand is there. The question now is whether other entrepreneurs will follow that playbook, or if we’ll keep getting these half-hearted local clones that promise the moon because they don’t have the scale to deliver anything more honest.

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