“Financial technology, also called FinTech, is potentially a major Dutch export product. Although the Netherlands is doing well, we tend to underestimate our own performance.”,
says Peter Kwakernaak, CEO of Dutch FinTech company AcceptEmail. The company established itself in New York last year and serves the US market with a cloud service for sending digital and mobile bills and payment requests. Isn’t it strange that the Dutch wish to help Americans digitally? “Not really, Americans are not that innovative in this area,” says Kwakernaak.
How would you describe the current status of FinTech in the Netherlands?
"The status is generally good and at the same time this is one of the better kept secrets. We are good at developing infrastructure and trade in the Netherlands, including in the field of finance. Whether it concerns water management, mobile/online payments or the way our banks work; there is plenty of knowledge and we are on top of new developments most of the time. This becomes evident when you look at successful companies like payment services provider Adyen, Fox-IT with cybersecurity and Innopay with consultancy in the financial sector.”
Should we consider FinTech as an export product?
“Certainly. FinTech could be more important for our export business than many realize right now. There are considerably more exciting developments in the Netherlands than in the US. Take, for instance - a big thing in the US - the ApplePay, a POS payment from a wallet: such a digital wallet always goes back to a debit or credit card, which is nothing new. The reason we see opportunities in for example the US is because their way of paying bills is not very innovative. There still exists a culture in which people mostly pay with checks and paper, or from so-called online billing portals, where you have to log-into with yet another pair of userid / passwords. Millennials do not want to get involved in this. The lack of convenience and automation is most unfortunate.”
“Could be more important for our export business”: what is still missing?
“That's what Americans are generally better at; scalability. New financial services are developed for the Netherlands, but the way Adyen knows how to scale up internationally, is lacking with others. I have the feeling we tend to focus on the development of start-ups in the Netherlands. Everything and everyone is busy with this, but what about the next step?
“The Dutch like to do things smarter. This fits in well with the third phase in which the Internet is in now. Following the first phase - advertising your company brochure on the web and the second phase of interaction via social media - transactional has now become the focus: Closing agreements, innovating the payments process – this is where the Web is currently headed. At the same time, banks feel forced to learn how to differentiate themselves. Combined, this offers interesting possibilities for FinTech.
“Currently, business in the Netherlands still wants to be everything for everybody: the country of biotech, Internet of Things, dredging and water management. If you aim to be more than tulips and cheese in the international business world, you should come across as focused, especially from the government. Obviously, from my position I would choose FinTech.”
How can the government play a role in this?
"You have to look at fully FinTech-targeted trade missions, but also consulates that assist locally and set up Start-up Delta-like programmes. Think of a road show and promotion campaigns to make FinTech visible: show what we – as the Netherlands - have to offer.”
“It's not that this is not already happening - Holland FinTech is already doing this partly - but it should more concentrated. Make it a priority for the government and assess the results after two years: They could include employment, cooperation between industry and government, and a new business card to change international perception of our country. The fact that Money2020 - the world's largest exhibition for FinTech – has settled in Copenhagen also says something. The Netherlands has not succeeded or tried hard enough to bring this event to our country.”
You do also notice that many companies are still insufficiently scalable. Are they ready?
“The proposition of many FinTech companies is actually very scalable. The only flaw lies in insufficient knowledge of and access to local markets. You have to have access to resources such as workforce and funding. The FinTech industry has a need for 'smart money' - a network that gives you access to knowledge and distribution of your services. American VCs (venture capitalists, ed.) are better at this. We need to improve here.”
“We as AcceptEmail consciously chose to start in England, Germany and the US - the major B2C countries - using our own resources. We ran into issues that were insufficiently considered. Our knowledge of the local market and network could have been more extensive. We are currently closing that gap.”
What local conditions are important to consider if a FinTech company establishes itself in the US?
“Understanding local culture stands for understanding the context in which locals think and act. Many issues that are dealt with at “middle management” level in the Netherlands are dealt with at top level in the US. For instance, you can’t just purchase new technology as a department head; this can cost you your job. The Dutch are anti-authority, which provides room for initiatives and freedom, and fuels innovation; in the US everything is organised top down and people listen to their boss very well. They are scared to act on their own, even when their company could really benefit from their initiative.”
And, you must learn to translate your message: “AcceptEmail is a nice system that delivers faster payments” is not enough. It’s all about figures and metrics, about ‘show me the money’
“Helping people pay on time” does not sell to billers. Saying “It is a service that provides convenience to your customers and you can charge extra for it” works better.
“When companies learn this and build trust through a local network, then FinTech could be a much more interesting export product than it might seem at first.”
The day after the interview with Kwakernaak, Minister Dijsselbloem announced he wanted to attract a liaison officer. He hopes for an ambassador for this industry - comparable to Neelie Kroes - but with a strong emphasis on FinTech. Dijsselbloem says Finance and Economic Affairs has the task of ensuring that that person will be installed soon.