This article is an excerpt from the Deliverable D4.1 Policy Recommendations for Investor Attractiveness created by Impulse4Women for the FINE Project. For the entire deliverable text, please find it in the Resources area of the website.
The European fintech sector has experienced significant growth, driven by a combination of technological innovation, supportive regulatory frameworks, and evolving consumer preferences. In 2024, Europe witnessed a notable resurgence in fintech investments. Despite a slow H1, the sector rebounded in H2, leading to a total of 10% annual growth, reaching $8.7 billion, up from $7.9 billion in 2023. This growth underscores the continent’s strengthening position in the global fintech landscape [1].
Several regions have emerged as leaders in fintech innovation, notably the United Kingdom, France, and Germany, which collectively accounted for a substantial portion of Europe’s fintech deals in 2024 . These countries have fostered environments conducive to fintech growth through a combination of supportive policies, access to capital, and robust digital infrastructures [2].
Successful fintech ecosystems across Europe share common characteristics, including high levels of digitalization, agile regulatory environments, and strong collaboration between startups, established financial institutions, and regulators. These ecosystems are further bolstered by access to a skilled workforce and a culture that embraces innovation [3].
TRENDS IN EUROPEAN FINTECH INVESTMENT
In 2024, Europe’s fintech sector experienced a notable resurgence, this growth reflects renewed confidence in the continent’s tech industry, particularly in sectors such as digital payments, lending platforms, and blockchain services. Despite this overall uptick, the distribution of investments varied across regions. The United Kingdom maintained its leadership position, securing 576 fintech investment deals, more than three times the number recorded in Germany, which had 176 deals [4]. However, the total capital invested in European fintechs during the first half of 2024 fell by 25% year-on-year, from £3.2 billion in H1 2023 to £2.4 billion in H1 2024 [5].
The investment landscape also saw a shift in funding stages. Early-stage rounds accounted for 72% of all fintech deals in Europe in 2024, down from 78% in 2023, marking the lowest proportion since 2020. This trend indicates a more cautious investment environment, with a preference for lower-risk opportunities involving companies with established market traction[6].
Additionally, the European fintech sector witnessed a decline in the emergence of new unicorns. The number of companies achieving valuations exceeding $1 billion decreased, and many existing unicorns faced challenges in maintaining their valuations amid a significant decrease in funding rounds. PitchBook estimated that Europe’s aggregate unicorn value could be overvalued by nearly €100 billion, indicating potential overestimations in previous valuations [7].
Despite these challenges, certain fintech segments demonstrated resilience and adaptability. For instance, the ‘buy now, pay later’ (BNPL) sector continued to attract significant investments, with companies like Affirm securing a $4 billion financing deal to extend more than $20 billion in loans over the next three years [8]. Similarly, European fintech firms such as Revolut and Bunq achieved substantial valuations and expanded their services, reflecting the sector’s ongoing potential for innovation and growth.
Overall, the European fintech investment landscape in 2024 was characterized by a cautious yet optimistic approach, with investors focusing on sustainable growth and profitability. While challenges such as valuation adjustments and reduced funding rounds persisted, the sector’s adaptability and the emergence of new financial technologies continued to drive interest and investment.
KEY REGIONS LEADING IN FINTECH INNOVATIONS
In 2024, several regions within Europe emerged as key leaders in fintech innovation, distinguished by their supportive regulatory frameworks, technological infrastructure, and capacity to attract sustained investment. France, the Netherlands, and Ireland stand out as advanced fintech ecosystems within the EU. France has demonstrated leadership in open banking and regulatory technology, supported by state-led investment in digital finance and Paris’s role as a magnet for fintech talent. The country’s regulatory clarity and engagement have allowed startups to scale more rapidly within both domestic and cross-border markets [9].
Similarly, the Netherlands continues to lead in data-driven financial solutions and digital payments, fostered by a collaborative culture between traditional financial institutions, fintech startups, and regulators. Ireland has also seen sustained growth in the fintech space, especially in areas like payments, compliance technology, and financial software, aided by a favorable tax environment and access to highly skilled tech and finance professionals [10].
While not part of the EU, the United Kingdom remains a critical point of reference as a global fintech benchmark. Home to one of the largest and most mature fintech ecosystems globally, the UK has consistently attracted high investment volumes and maintained a dense concentration of fintech companies – thanks in part to its adaptive regulatory approach, including early adoption of 14open banking and its widely regarded Financial Conduct Authority sandbox model [11].
Singapore, although geographically distant, is another global comparator often cited for its innovation-forward regulatory environment and government-backed fintech development strategies. Its emergence as a digital finance hub in Asia offers EU regions a model for regulatory agility and ecosystem coordination [12].
Moderate fintech ecosystems such as Spain, Malta, Cyprus, and Greece are also worth noting, though their contributions are more limited in scale. Spain, in particular, has made consistent progress in fostering digital payment services and supporting API standardization under PSD2, helping it emerge as a southern European leader in fintech development. Greece and Cyprus remain in earlier stages of ecosystem maturity but are advancing steadily through domestic initiatives aimed at improving financial inclusion and digitizing financial services [13]. Malta continues to use its strategic location and favorable regulatory posture to position itself as a niche player in blockchain-based financial services, although regulatory capacity constraints limit its scalability.
Taken together, these regions illustrate how advanced ecosystems in Western and Northern Europe are setting the pace for fintech innovation in the EU, while select moderate ecosystems are beginning to build the foundational elements needed to compete regionally. Comparisons to global leaders like the UK and Singapore further contextualize the policies and ecosystem characteristics that define fintech success.
COMMON CHARACTERISTICS OF SUCCESSFUL FINTECH ECOSYSTEMS
Successful fintech ecosystems across Europe tend to share a core set of characteristics that enable sustained innovation, market growth, and global competitiveness. Among the most critical is a proactive and adaptive regulatory environment. Jurisdictions like France, the Netherlands, and Ireland benefit from clear licensing pathways, strong alignment with EU directives such as PSD2 and MiCA, and active engagement between regulators and market participants. This allows startups to navigate compliance requirements more easily while fostering trust among consumers and investors.
Another key factor is the availability of skilled talent. Ecosystems anchored in cities like Paris, Dublin, and Amsterdam offer access to deep pools of technical and financial expertise, often supported by strong university systems and international labor mobility. These ecosystems are further strengthened by access to early-stage and growth capital, often through a mix of private venture capital and public co-investment schemes designed to promote innovation.
Infrastructure and digital readiness also play an essential role. High levels of internet penetration, national digital identity schemes, and established payments infrastructure enable faster deployment of new financial technologies. Lastly, successful ecosystems demonstrate a strong culture of collaboration between startups, incumbent financial institutions, and public sector stakeholders, which helps accelerate product development and regulatory alignment. While each region has its own context, these shared traits have consistently emerged in the most advanced European fintech ecosystems and serve as a benchmark for developing markets aiming to scale.
