Going global in 2024
As a result of a turbulent climate and shrinking budgets, many in-house counsel have anxieties over managing their teams while trying to expand internationally. GCs cite difficulties maintaining motivation – particularly as sole counsel – during the highs and lows their businesses face. Fintechs still have big goals they want to achieve but are having to adjust how they attain them in this market.
Going global is still on many companies' radars, but a number of fintechs are looking to slow down growth as a result of unpredictable external factors around them. Regulation that impacts much of the fintech sector is evolving at pace globally, geopolitical factors remain a concern, and maintaining and gaining licences is more complicated since Brexit. GCs are also having to keep stakeholders aware of the fact that international expansion is not as easy as it used to be, with some legal and regulatory processes and applications now taking longer than before. This can be attributed in part as a result of Brexit, an unfavourable market and also due to significant new regulations emerging.
In-house counsel play a particular role in supporting the global expansion of fintechs. “Part of the strategic decision and asking where you expand is threefold," explained Yara Owayyed, general counsel, YouLend. "One – which countries do we want to go into? Two – are there commercial considerations such as: do we have enough demand? Do we have partners that would want to partner up with us in this jurisdiction? And three – how realistic is it for us to launch in this jurisdiction and how quickly can we go live?”
“The regulatory environment in the FinTech space is in flux to a certain extent because you've got governments who are rushing to keep up with innovation, and regulations being introduced all the time. So when you're looking at a new jurisdiction to enter into, as you go through the process the regulatory environment isn't necessarily going to be the same as it was from the outset.”
- Nick Grafton-Green, Senior Regulatory Counsel at Checkout.com
There are things that GCs can do to reduce the load ahead of time. This can include working out what presence is needed on the ground in areas you are thinking of expanding into, what data localisation requirements a jurisdiction might have, and the governance and policies you need to have in place.
Diego Ballon Ossio, partner at Clifford Chance, shares some key additional factors that fintechs need to consider when thinking about international expansion.
A key challenge for lawyers is the need to see around corners, as the environment you enter can change rapidly when dealing with products and technologies that have yet to be legislated for.
It wouldn’t be going global without a brief note on the US. The US still seems to be held up as the ‘Holy Grail’ for many businesses, but the slowdown in fundraising and IPOs appear to be encouraging European fintechs to be a little more cautious as to when they launch in the US.
