Partner Perspectives: Nikos Askotiris

How does the regulatory environment for fintech companies in Greece differ from other countries? How has your expertise in banking and finance law intersected with the field of fintech?

Historically, there has been no fintech-specific legislation in Greece. The Greek financial legislation was, and still is, based on EU law, generally implemented without gold-plating. Depending on its scope of business, a fintech company may be regulated as a financial institution, for instance as an investment firm or electronic money institution. In parallel with startups, existing banks and other financial firms are adjusting their activities to new technological solutions. The extensive practical experience of our team in both regulatory advice and banking and finance transactions has helped us keep pace with the development of the fintech ecosystem and remain at the forefront.

What are the main drivers for the growth of fintech business in Greece? Can you share some examples of the Greek market attracting international investors?

Greece has recently adopted technology-friendly legislation, which provides legal certainty on key points, such as DLT, smart contracts, and artificial intelligence. Both financial regulators in Greece, the Bank of Greece and the Hellenic Capital Market Commission, called HCMC, promote innovation. The Bank of Greece has created a Regulatory Sandbox, encouraging small-scale tests. Apart from that, both the Bank of Greece and the HCMC have in place Innovation Hubs, to identify critical topics and give appropriate guidance. I must also say that certain key transactions in the payment services sector have helped the Greek fintech market gain momentum, fueled by the increasing demand for digital payments. For instance, all four Greek systemic banks have spined off their card acquiring business, transferring it to specialized entities. This process brought in major players from the international payments industry. The resulting synergies were unprecedented in the Greek market.

Many fintech startups often face regulatory challenges and compliance issues. How do you assist your clients in navigating the complex regulatory landscape in the fintech sector?

Fintech startups seek optimised business structures. They also put emphasis on the functionality of their solutions for end users. Particularly during their first steps, fintech companies want everything to be tailor-made; at the same time, safeguards against risks are necessary. There is a big challenge there: a startup may look for more flexible solutions, but it will need to revise and adjust its structures as it grows. Our team includes experts who tirelessly seek alternatives. We navigate our clients through the grey areas during all stages of development of a startup. We help them assess the risks of each option, and find the solution that best suits their needs. Our approach is based on two pillars: efficiency and ongoing resilience. At the end of the day, what matters most for the sustainable success of a fintech startup? We believe it is to create a business resilient to a constantly evolving industry and regulatory landscape.

What are the challenges that an international investor in Greek fintech companies usually faces? What is the added value of your firm’s advice in M&A projects in the fintech area?

M&A transactions in the fintech sector have certain unique features. The regulatory due diligence needs to cover a wide array of highly technical matters. Some key words are cybersecurity, outsourcing, AML, consumer protection. Ticking a checklist to confirm that the necessary policies and procedures are in place is necessary, but likely not sufficient. Our team’s strategy, when acting on the buyer’s side, is focused on the true red flags. We prioritise risks and help reflect them in the transaction structure; if necessary, even outside the usual toolboxes. Depending on the type of the target firm, closing may be subject to a fit-and-proper approval process. Such a regulatory filing may be complex and time consuming. Contrary to what one might think, obtaining approval is much more than collecting documents. As legal advisors, we help our client go through the process as smoothly as possible. To do so, it is essential to interact proactively with the regulator, and be keen to find practical solutions. This is what makes us different and explains why our experience is beyond compare.