Global FinTechs turn to financial hubs for cross-border growth

By Puja Sharma

• Access to international markets is a key priority for a third of executives when choosing a jurisdiction 
• Around 28% see access to funding and investment as a challenge, while the same number point to regulatory compliance and changing policies
• BVI Finance launches Destination Digital at FinTech on the Seas, a first-of-its-kind digital assets conference taking place on Necker Island

 The Destination Digital report, launched today by BVI Finance, reveals the strategic priorities, challenges, and jurisdictional considerations facing global FinTech businesses. Based on the views of 451 FinTech executives from the world’s major financial hubs, it finds that a striking 94% of global FinTech leaders consider cross-border growth either critical or important to their success. In fact, 63% are already operating through entities in International Finance Centres (IFCs) showing that jurisdictions play a pivotal role in how decentralised and digital first businesses operate and grow. 

When FinTech businesses choose to incorporate, several factors guide the decision-making process. Access to international markets and banking services is cited as crucial by 33% of global executives, closely followed by key attributes of jurisdictions such as a stable and business-friendly regulatory environment (32%) and an established professional services network (27%).

This new generation of businesses has emerged due to rapid technological advancement, radically changing new business models and products. With this in mind, global executives see investment in emerging technologies as crucial to staying competitive. In fact, nearly half (46%) of FinTech businesses say tech integration to enhance operational efficiency is a priority over the next two years, with business leaders within exchanges (64%) and the tokenisation sector (59%) especially focused on automation and digital infrastructure.

Despite their drive for global growth, FinTech businesses face a range of challenges as they scale and expand. The survey also found that over a quarter (28%) see access to funding and investment as a challenge, while the same number (28%) point to regulatory compliance and changing policies as a major obstacle to business growth. The fragmented and ever-changing regulatory landscape, particularly in the digital assets space, means these businesses require jurisdictions with the ability to navigate compliance requirements, such as Anti-Money Laundering (AML) and Know Your Client (KYC), across multiple markets – given 24% of global FinTech executives see this as significant challenge, IFCs provide the solution with an innovative approach to regulation. 

Elise Donovan, CEO, BVI Finance, said, “As this new generation of business look beyond borders to scale, they must navigate complex and volatile geopolitical and economic conditions, and crucially, evolving regulatory frameworks. This has created a fragmented operating environment for fast-scaling companies operating on a global stage.

“As they plot out their roadmap for growth, where to incorporate their businesses has become critical to how they navigate this complex web, and how they balance credibility and security with the ability to innovate at pace. Given this, it is critical to understand the needs of this new generation of business and how they are evolving. One thing is crystal clear, IFCs have a pivotal role to play and the BVI is leading a wave of innovation.

“As businesses within the global FinTech sector increasingly seek to incorporate in jurisdictions with the expertise, infrastructure and regulatory clarity, IFCs will remain critical to the industry’s transformation and global growth.”