The regulatory pendulum in European fintech isn't swinging toward deregulation as dramatically as some might have expected. Philippe from Simont Braun law firm cuts through the noise to explain what's happening in the European regulatory landscape.
Despite widespread speculation following the European Commission's 2025 work program announcement, major financial regulations like FIDA (Financial Information Data Access Regulation), PSD3, and PSR remain firmly on track. What we're witnessing isn't deregulation but rather a nuanced approach to limit unnecessary regulatory growth – pushing back against what Philippe aptly calls "regulatory overdrive" at the technical implementation level.
The conversation reveals a significant shift in regulatory strategy: moving away from directives toward regulations as the preferred legislative instrument. This change helps prevent "gold plating" (where countries add additional regulatory layers during implementation) and creates a more unified European market. Meanwhile, AI adoption in financial services continues to evolve, with applications spanning front office (chatbots, investment advice), middle office (KYC, AML, fraud detection), and back office functions. The upcoming AI Act will introduce a risk-based approach affecting financial services without creating finance-specific regulations.
Perhaps most intriguingly, Philippe suggests financial institutions may have a competitive advantage in the coming era of AI regulation due to their extensive experience navigating complex regulatory frameworks. For fintech innovators looking to launch new products or interact with regulators, understanding these nuances could make all the difference between compliance headaches and market success.

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Koen Vanderhoydonk
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