European Fintech Vendors Risk Losing to Global Giants
Written by Enrico CamerinelliSupply Chain & Finance- Strategic Advisor Helping European Fintech Vendors Break Into Commercial Banking The Uncomfortable Truth[1] European fintech firms have since now faced challenging market conditions, including funding constraints and increased competition that lead to consolidation among smaller players. This is mostly driven more by macroeconomic factors (e.g., post-2021 funding environment, interest rate changes) than by incumbents systematically taking their accounts. However, with banks wanting unified platforms, the provision of best-of-breed fintech solutions for trade finance, supply chain finance, payments, and core banking risk of no longer satisfying procurement teams. European fintech vendors face stark choices: dominate a niche, seek acquisition, or invest heavily in platform expansion to compete with established giants. Technology No Longer Differentiates Documentary credit processing, invoice financing automation, and supply chain visibility tools have become commoditized. Banks can access similar functionality from multiple providers, compressing margins and trapping vendors in a feature-parity race. Procurement criteria transformed completely. Banks evaluate integration depth over feature breadth. Questions focus on seamless treasury system connections, data orchestration across tech stacks, network effects through banking partnerships, and integration with ERP systems. Technical excellence has become merely the entry fee. Winning vendors embed themselves into broader commercial ecosystems, linking trade finance with receivables platforms, connecting supply chain data with working capital facilities, and orchestrating multi-bank arrangements. Standalone point solutions face commoditization and price pressure. Survival depends on building genuine network effects through critical mass adoption and becoming the integration layer banks cannot easily replace. Mistakes Regional Vendors Make Competing on Features European vendors deplete engineering budgets chasing feature parity with incumbents. When procurement teams create comparison matrices with hundreds of feature checkboxes, the fintech player has already lost. Global vendors have decades of client requests baked into bloated platforms. You cannot out-feature them. What actually closes deals is implementation speed (e.g., 12 weeks versus 18 months); genuine API-first architecture without middleware complexity; and support teams responding in hours instead of weeks. A European fintech vendor spent €2M building a rarely-used reconciliation module because “the RFP required it,” while burying their 48-hour integration capability that saves banks six months and €500K on page nine of their pitch deck. Geographic Dilution Vendors waste millions pursuing “pan-European” strategies while home market advantages evaporate. A Dutch vendor dominated trade finance in the Netherlands, then pivoted to become pan-European. They translated platforms into four languages, hired country managers in Milan and Madrid, and redesigned workflows for every European regulatory framework. Revenue grew 12%. Burn rate tripled. Meanwhile, a focused German competitor captured their Rotterdam pipeline through superior execution in digitizing letters of credit and accessing liquidity from funding partners. Deep integration with domestic customs systems, connections with local bank relationship managers, and understanding of regional supply chain seasonality have now become footnotes in generic marketing. Successful vendors do the opposite: they double down on core strengths and find similar micro-markets elsewhere. A Norwegian trade finance platform targeted seafood exporters specifically. First in Norway, then Scotland, then Galicia. Same buyer, same letter of credit complexity, same regulatory knowledge. They stayed narrow and won. Undervaluing Physical Presence European fintech vendors risk of burning millions believing superior technology opens doors. It doesn’t. A platform with physical presence in one country outperforms brilliant cloud-native solutions sold remotely every time. European commercial banks don’t buy technology. They buy relationships, regulatory comfort, and the ability- sad but true- to blame someone local when things fail. When trade finance infrastructure fails at 3 AM and €50M in letters of credit are stuck, procurement officers want someone they can call who speaks their language and understands their market. Not a chatbot. Not a support ticket. A person in their country who comprehends local nuances. The Five-Question Framework Question 1: Can You Name Three Clients? Strategic clarity means that you, fintech vendor, can name three clients using your platform successfully, describe the exact pain points your solution solved, and articulate why they’re referenceable. If this takes longer than an hour, then you are not ready to scale. Better run smaller pilots, gather proof points, and build references that sell. European banks reward evidence over enthusiasm. Question 2: What Should You Stop? Strategic retreat may be more valuable than expansion plans. Not all geographies deserve attention. Vendors too often waste months trying to crack corporates in one country while pipelines in another go cold. Southern Europe’s decision cycles stretch beyond Series B timelines. If you’re sub-€10M in annual revenue, pick two markets maximum. Kill feature bloat. Your blockchain-based documentary credit module that three clients requested? Eliminate it. That AI-powered risk scoring you’ve built for eight months while banks request better Excel exports? Stop. Question 3: How Do You Amplify Regional Advantage? I see fintech vendors lose pipeline not because their technology is weak, but because roadmap priorities misalign with how banks actually buy. You build features existing clients requested while prospects dismiss you after strong POCs. Current clients optimize for operational efficiency. Prospects need proof that you solve their strategic pains. Be that regulatory compliance or correspondent banking costs. Audit your next two quarters. Map every roadmap item to sales objections that cost you deals. Ruthlessly deprioritize features that don’t directly address prospect concerns. Your client success team will complain. Your sales team will close deals. Question 4: Who Should You Partner With? European fintech vendors pour millions into flashy banking partnerships while ignoring unglamorous middlemen who actually close deals. System integrators (SIs) and regional consultancies (the ones banks actually listen to) sit untapped. In commercial and trade finance, procurement doesn’t start with your CMO’s LinkedIn post. It starts when a bank’s trusted system integrator flags capacity constraints during core banking upgrades. Vendors land three implementations in six months through one well-placed SI relationship. Deals that would’ve taken 18 months of direct prospecting. Question 5: What Does Victory Look Like? Your realistic first-year market share in European commercial banking isn’t 15%. It’s 2-3% if you’re exceptional. Regional banks with €20-50B in assets are desperate for digitization but ignored by major providers. They…
Franklin
Finance Automation Is Having Its Sourdough Starter Moment
This article is a contribution from our partner, Embat Theo Wasserberg, Head of UK&I at Embat In early 2020, everyone suddenly had time to bake bread. Instagram was filled with proud photos of bubbly starter cultures. People read obsessively about hydration ratios and fermentation schedules, and then came the actual baking. Only most loaves emerged as dense, sour bricks. The fundamental lesson isn’t about desire or ingredients, it’s about the gap between growing a starter and maintaining one. These are completely different challenges. The first requires enthusiasm; the second requires changing how your kitchen works. I’ve spent 2025 watching finance teams get stuck in exactly the same place. The Kitchen That Can’t Bake The conversations I have with CFOs follow a pattern. They’re excited about AI, they’ve read the articles, attended conferences, and maybe run a pilot. But then they show me their architecture: legacy ERPs that can’t expose data properly, point solutions that don’t talk to each other, manual reconciliation processes that shouldn’t exist in 2025. They’ve got the starter culture bubbling away – the ambition, the budget approval, the stakeholder buy-in – but the kitchen itself can’t support what they’re trying to bake. Think about what this parallel actually means in practice. Both involve living systems that resist rigid rules. Sourdough starters are colonies of wild yeast and bacteria – they respond to temperature, feeding schedules, and flour quality in ways that can’t be fully programmed. For twenty years, finance automation assumed the opposite: that every transaction would follow a predefined path, that exceptions were rare bugs rather than daily reality. The 30% Brick Wall That’s why rule-based systems automated 30% of work and then hit a wall. They were designed for a world where payments arrive with perfect reference numbers and customers never consolidate invoices. It’s like writing a recipe that only works if your kitchen is exactly 21°C and your flour is exactly 12% protein. Real kitchens – and real finance departments – are messier than that. What makes AI different is that it’s built for messy, unstructured environments. It learns patterns rather than following rules. When a payment arrives with a typo in the reference field, it doesn’t freeze and wait for human intervention – it recognises intent from context. This is precisely how an experienced baker can look at their starter and know it’s ready, even though it doesn’t match the textbook description of “doubled in size with large bubbles throughout.” You Can’t Bake Sourdough in a Microwave But here’s where the sourdough parallel gets uncomfortable: AI adoption requires the same thing successful bread-baking does. You can’t just add a starter to your existing routine. You have to rebuild the routine around the starter’s needs. Most finance teams I work with are trying to drop AI into their current architecture the way someone might try to bake sourdough in a microwave because that’s the heating appliance they already own and use. The technology is irrelevant if the surrounding infrastructure can’t support it. This is the architecture problem, and it’s why so many pilots produce impressive demos but never scale. We were at Google’s Gemini Founders Forum when they named it: AI theatre, the gap between what looks transformative on stage and what actually survives in production. Prove Something and Then Scale The contained‑value approach we advocate – focused use cases, defined datasets, and measurable outcomes – is the same advice every sourdough guide gives. Start with one simple loaf. Master that. Then experiment. Don’t attempt twelve kinds of bread at once with a starter you fed for the first time yesterday. Yet that’s precisely what happens in corporate finance when companies launch sweeping “AI transformation initiatives” before they’ve automated a single reconciliation workflow successfully. I tell treasury teams: prove you can automate one thing completely before you write a roadmap for twenty things. Get cash visibility working in real-time for one entity before you roll it out globally. The discipline is in resisting the urge to scale before you’ve proven you can execute at a small scale. When the Dutch Oven Finally Arrives The interesting thing about the regulatory wave hitting finance is that it doesn’t actually change the fundamentals. PSD3 and ISO 20022 will help – they’re the equivalent of finally getting a proper Dutch oven after months of failed attempts with a sheet pan. Standardised connectivity will remove fragile data flows, which is one of the biggest technical barriers we see. But here’s the uncomfortable truth – a tool only matters if you’ve learned the fundamentals. Teams that have been practicing contained-value AI deployments will scale quickly when those regulations hit. Teams that have been waiting for perfect conditions will still be reading articles about transformation. Nobody Wants to Learn Using a Microwave Kitchen What all this means for talent is straightforward, but nobody wants to say it out loud. The best finance graduates don’t want to work at companies still reconciling CSVs across fifteen spreadsheets for the same reason nobody wants to learn to bake at a restaurant still using a microwave. It signals that the organisation doesn’t understand its own craft. And here’s where the gap becomes a problem. When I talk to treasurers who can’t provide real-time liquidity visibility, I think about what message that sends to incoming talent. The narrative is clear: if your systems look and behave like a microwave kitchen, top talent will go elsewhere. Where Reality Bites The fundamental lesson for 2026 isn’t about technological maturity; it’s about exposure. The technology is already adequate. What changes is that the space between companies that executed and companies that deliberated becomes impossible to hide. In sourdough terms, you can claim you’re “really into artisan bread” for only so long before someone asks to see your loaf. And that’s where reality bites. Finance leaders sitting in 2026 with transformation roadmaps instead of working pilots will face a simple reality: their competitors have been baking bread while they’ve been perfecting their starter. And in the treasury department, nobody cares…