fivehundred magazine > Practice area spotlight: Fintech > Collaboration and curiosity are key

Collaboration and curiosity are key

To be a good fintech lawyer you need not only comprehensive legal skills, but also an understanding on what fintech – and the particular business – is all about, writes Hanna-Mari Manninen of Dittmar & Indrenius

Please give us an overview of the current legal market in Finland and how any recent developments have impacted your practice?

Legal services are offered in Finland by variety of different type of actors, mostly by attorneys-at-law offices but also by other law firms and by consulting and accounting firms. The competition has been increasing, but it has also been welcomed and spurred us to work even harder to stay on top of the curve.

Digitalisation has affected legal market in Finland. This means that new digital tools have been implemented, but digitalisation has also had a big impact on legal questions we are dealing with daily. Fintech is not the only, but certainly one, of fields of law that are more and more affected by digitalisation and include more complex substance questions than before.

Also, as around half of Finnish fintechs currently in practice were founded within the past five years, the need for legal services within the fintech industry and lawyers with expertise in fintech has increased. Naturally, also the wide and extensive legislative amendments, in particular in the field of payment legislation and data protection, have made lawyers around Europe busy.

What significant trends exist in the fintech market presently? Are you seeing these just domestically or internationally as well?

Finland has provided a good landscape for the practicing of fintech for a long time and pioneered e.g. online banking in the 1990s.

Currently we have a strong and vivid fintech market in Finland. Especially crowdfunding platforms and B2B services have been particularly strong. Lately, payment platforms and services have strengthened. Such services do still form a big part of the Finnish fintech market.

Another significant trend that we have seen recently has been the growing cooperation between traditional banks and fintechs. Such trend is being seen internationally, but especially in Finland.

In addition, several blockchain projects are live and more are being developed in Finland.

What are the three biggest challenges to practising fintech in Finland?

Many fintechs have found it challenging to keep up with the ever-changing and, to some extent, stringent regulatory requirements.

Another challenge is regulation that does not exist or has unclear scope of application (e.g. companies involved in ICOs must assess whether the ICO falls within the scope of securities market regulation). Third challenge for practising fintech in Finland is how to adequately secure the product and the valuable customer data. Fintechs do face such technical challenges regardless of where they operate, but the Finnish regulatory regime requires adequate data protection and sets several types of notification obligations that need to be taken into account.

How does fintech fit into the firm as a whole? Is it easy to collaborate with other teams?

We see fintech as a complex of various legal questions that relate to several fields of law. This requires seamlessly connected teams that support clients in achieving their objectives and growth.

Putting the most suitable teams together not based on structured practice groups but on the matter at hand has long been at the core of our approach. Fintech requires such an approach, and, thus, fits to our firm well. Taking into consideration that fintech is a shared interest for many lawyers, collaboration with each other is also easy.

What advice would you give to the next generation of fintech lawyers?

Fintech lawyers need to master relevant financial regulations and other relevant fields of law, such as regulations covering the processing of data. To be a good fintech lawyer you would need not only comprehensive legal skills on certain topics, but also an understanding on what fintech – and the particular business – is about.

Compared to some other fields of legal services, fintech is not defined by a specific set of rules and regulations, but rather by the business solutions it provides. Fintech lawyers also need to be curious and keep up with the development.

What are your predictions for fintech in Finland over the next five years?

The Finnish fintech scene has been growing rapidly, and we expect it to do so also over the next five years. As building a company and customer base is to certain extent slow, we will surely see more investments in fintech companies over the next five years.

In particular PSD2 is currently fostering open banking and overall boosting new fintech services in Finland. However, customers will see these new services in a larger scale only during the next few years, as banks have not yet opened dedicated interfaces to allow third-party service providers to access customer accounts.

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