Europe's single market is still stuck in the paper age. Let's fix that.
The European Commission finally calls for a paradigm shift from document-based to data-based processes.
A staggering €719 billion cross-border lending market for individuals remains fragmented by outdated systems and paper-based procedures. For the 45 million expats and multi-country residents across Europe, this means starting their financial lives from scratch every time they cross a border.
The European Commission just acknowledged this reality in their ‘Communication on the Strategy for a Simple, Seamless and Strong Single Market Communication’. Their conclusion? We need a paradigm shift from document-based to data-based processes. Real-time, automated digital data sharing between businesses and public authorities isn't just nice-to-have – it's essential.
Consider Niamh, a skilled professional who moved from Ireland to Germany for a new job opportunity. Despite having an excellent credit history in her home country, German banks see her as a financial ghost. She faces higher interest rates, security deposits, and limited access to financial products that locals take for granted. All because her financial identity didn't travel with her.
At Mifundo, we're building the solution: a unified credit data network that creates a portable financial identity. By connecting with public credit registers across Europe, we enable the secure, consent-based transfer of credit histories. Your financial reputation follows you, as it should in a true single market.
But we still face significant hurdles. Many central banks and credit registers operate with systems designed decades ago. Requesting a credit report often means printing forms, mailing documents, and waiting weeks for processing. This doesn't just create inefficiency – it perpetuates inequality, increases fraud risks, and contradicts the very essence of European integration.
The Commission's call for each Member State to appoint a Single Market Sherpa is a step in the right direction. These senior officials can help tackle cross-government obstacles. We believe central banks should align with this initiative and work with their national sherpas to modernize credit data systems.
The strengthening of SOLVIT and new channels to flag barriers to financial market integration also signal progress. But for innovative scale-ups like ours, the pace of change matters. Every day of delay means more Europeans facing unnecessary financial exclusion.
We're committed to working with regulators, central banks, and credit bureaus to accelerate this transformation. Our vision of a borderless financial ecosystem isn't just good for business – it's essential for a truly integrated European Union that works for its citizens.
Are you experiencing these cross-border financial barriers firsthand? Or are you a financial institution looking to better serve your international customers? Let's connect and build a financial system that moves as freely as Europeans do.
