Fintech 2025

BELGIUM Law and Practice Contributed by: Joan Carette, Philippe De Prez and Thomas Derval, Simont Braun

1. Fintech Market 1.1 Evolution of the Fintech Market Areas of Focus In Belgium, while the first fintech initiatives focused on alternative financing solutions such as crowdfunding platforms, the sector really gained traction with the development of pay - ment solutions. These include retail payment platforms, with a fair share of money remitters, but also B2B payment services such as pro - fessional foreign exchange (FX) payments for small and medium-sized enterprises (SMEs). As a result of Brexit, several UK payment service providers (PSPs) selected Brussels to establish their European headquarters. The arrival of these players has added a lot of maturity to this sector in Belgium, which has become one of the most important fintech verticals in Belgium. In addition, many fintechs active in Belgium also focus on providing solutions to the financial sec - tor (regtechs). Evolution of the Sector Artificial intelligence and open finance are cur - rently among the most prominent topics in the fintech sector. Under the upcoming EU Regula - tion 2024/1689 of 13 June 2024, laying down harmonised rules on artificial intelligence (the “AI Act” ), fintech companies that develop or use AI will need to comply with a new set of rules, vary - ing based on the type of AI involved. The AI Act will be implemented in stages, with initial provi - sions taking effect as of 2 February 2025 and full enforcement expected by 2 August 2026. Meanwhile, the EU Proposal for a Regulation on a framework for Financial Data Access (FIDA), currently under interinstitutional negotiations, aims to establish a framework for the exchange of financial data across all verticals of the finan -

cial sector. If adopted, this ambitious regulation could present a major opportunity for the devel - opment of innovative products by fintechs. 2. Fintech Business Models and Regulation in General 2.1 Predominant Business Models The predominant fintech business model in the Belgian fintech industry is the payment vertical, which is populated by both incumbents and fin - tech entities. Belgium also sees many fintechs active in investment as well as many regtechs. Although Belgium has seen a surge in projects related to crypto-assets and the blockchain technology, that vertical is not predominant in Belgium. Payment Services The payment sector in Belgium is varied. There is an important activity on the B2B side, nota - bly in the field of professional FX payments and acquiring services for merchants. Follow - ing Brexit, several international money remitters have located their EEA headquarters in Belgium, which has then attracted other money remitters, as they are looking for a level regulatory play - ing field and, therefore, wish to be supervised by the same authority as many of their major competitors. Investment Services In Belgium, both incumbents and fintechs offer innovative investment solutions covering various types of investments, but also aiming at different types of clients. (Automated) investment solu - tions provided via well-designed smartphone apps and relying on ETFs and automation of portfolio management are especially on the rise.

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