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Getting into gear: governments get organised for fintech

Global Government Fintech Lab 2022 panel session one: Karen Cullen, Doris Dietze, Mari-Liis Kukk and Siobhan Benita (moderator)


The Global Government Fintech Lab 2022’s opening panel session analysed how government authorities should ‘get organised’ around the opportunities and challenges of the growing world of fintech, Daniel Tost reports

Governments, regulators and other public authorities are all stepping up their interest and exploration of the possibilities of fintech. But fintech’s very nature – combining finance and technology – means that exploring its possibilities and implementing policies straddles organisations, departments and job remits. In addition, fintech can be tricky to define; is growing (as technology evolves); and brings legal considerations (where laws themselves often lag technology).

In this context the opening panel session of the inaugural Global Government Fintech Lab – which brought together senior public servants exploring the opportunities created by fintech in Tallinn, Estonia, on 1 June 2022 – asked how government authorities can ‘get organised’ around fintech.

The session featured representatives from three nations: Karen Cullen, who heads a fintech steering group alongside her principal role as head of international financial services in Ireland’s Department of Finance; Doris Dietze, who is head of the digital finance, payment services and cyber security division in Germany’s finance ministry; and Mari-Liis Kukk, head of the innovation department in Estonia’s Financial Supervision and Resolution Authority.

The discussion, moderated by former UK civil servant Siobhan Benita, saw the trio address the principal question before moving into related topics such as overcoming ‘silo’ mentalities in the civil service.

All three countries are European Union (EU) member states, and the EU’s impact on national approaches to fintech was among the themes that emerged. Cullen, for example, referred to “fintech – or ‘digital finance’ as the EU Commission prefers to call it”, while Kukk explained that EU authorities had influenced her own organisation’s approach to innovation.

Ireland expanding fintech steering group

Karen Cullen

“How we organise for fintech is a big priority for Ireland,” Cullen said in her opening remarks, setting out how the Department of Finance’s steering group is the conduit through which the government is seeking to “maximise the opportunities and minimise the risks” of fintech.

The group exists against a backdrop of a cross-government approach to financial services, she explained, saying that the ‘Ireland for Finance’ strategy (issued in April 2019) contains a “vision for Ireland to be top-tier location of choice for specialist international financial services”.

After the EU published its digital finance strategy – which captures major fintech-related initiatives such as ‘MiCA’ (the Regulation on Markets in Crypto Assets’) and ‘DORA’ (Digital Operational Resilience Act) – in September 2020, it was “clear” that Ireland needed to adopt a ‘whole-of-government’ approach to fintech, she said.

The Irish government’s approach to fintech is therefore an “extension” of a “whole-of-government public-private collaborative model” promoted in the Ireland for Finance strategy.

The steering group, whose creation was announced in February 2021, is structured around ‘four Cs’: to co-ordinate on policy proposals; collaborate; contribute; and communicate (Cullen, whose day-job is based in her department’s risk and compliance unit, set out the ‘four Cs’ approach in an in-depth interview with Global Government Fintech last year).

“We’re in the process of expanding the fintech steering group to include representatives from across government and setting up working groups to allow the private sector – and I mean industry and academia – to fit into a formal structure,” Cullen said, illustrating the variety of departments and agencies being included (for example, education, inward investment and consumer protection). The breadth of fintech’s relevance across government emerged as a theme through the session (and indeed the whole event).  

German ministry’s ‘Digital Finance Forum’

Doris Dietze

Germany’s government is significantly stepping up its interest in digital technology, including its approach to fintech. After the federal election eight months ago, digitalisation was a priority topic in negotiations for the country’s governing coalition.

Like Cullen, Dietze emphasised the need for political will to enable public servants to properly structure themselves for fintech (then “everything else” follows) and the importance of developments in the EU where “a lot of the music is playing” for fintech.

Political support – led by Germany’s finance minister (Christian Lindner), as well as that of his state secretary – is the first of three pillars of the finance ministry’s organisation around fintech, Dietze explained. “We have politicians who identify with the topic, making digitalisation in general but also fintechs a priority. This is an important signal to the [fintech] community that we take this topic seriously and are really keen on improving,” she said.

The ministry’s structuring around fintech pre-dates last autumn’s election, though. “My team exists because it [fintech] was put on the political agenda about six years ago,” Dietze said. “Politicians prioritised fintechs because they saw – and still see – that in order to have a competitive financial industry you have to stay innovative. And a lot of innovation comes from fintechs that offer new business models and put pressure on traditional business models to adapt – so, there was huge demand to have a political agenda on it.”

Dietze described the ministry’s second fintech ‘pillar’ as organisational, with a digital finance unit acting both as a contact point for businesses and also as something of an internal ‘help-desk’. Currently, many things land in her in-tray because they include the words ‘fintech’ or ‘digital’, she said, yet after a closer look often turn out to be more of a trade or investment topic.

“What makes us different from other colleagues is that our team does not only consist of lawyers and economists, which is kind of typical for German administration,” Dietze said, adding: “We also have some IT experts with us, meaning we have much-needed skills now.”

The third pillar is a Digital Finance Forum, effectively an advisory board to the ministry. Formerly called the Fintech Council, this largely comprises private-sector experts and was “renewed and reformed” since Germany’s new government took office, Dietze explained. “We called it ‘Digital Finance Forum’ and not ‘Fintech Forum’ because it consists not only of start-ups but also traditional businesses,” she said. “This is important to us because traditional financial institutions are transforming as well.”

The forum spans payments, retail banking, investments, crypto and insurance, tackling overarching topics (such as tax or funding) collectively and more specific topics via separate workstreams. “We are hoping that the forum’s experts will develop a German digital finance strategy until [by] next year,” Dietze said.

Estonia authority seeks to champion innovation

Mari-Liis Kukk

Representing a financial supervisory authority, Estonia’s Kukk brought an alternative perspective to the panel.

Her department’s mission is help those with fintech-based solutions to understand the regulatory environment but does not make policy, Kukk pointed out.

The authority’s Innovation Hub, she said, was inspired by direction from the three European Supervisory Authorities (ESAs) – the European Banking Authority, the European Securities and Markets Authority and the European Insurance and Occupational Pensions Authority – on handling innovative fintech-based approaches.

“We see ourselves as innovation champions who are there to bridge the gap between fintechs and traditional structures,” she explained, saying that the Innovation Hub is akin to a “buffer” intended to diffuse “natural tension between disruptors and traditional systems”.

Kukk recommended that innovation teams be created in more governmental organisations as the nature of ‘innovation’ per se – as exemplified by fintech-based solutions – is always perceived to “bring up uncertainties” for lawmakers.

She also suggested the development of a shared strategy for government organisations to help them work more closely on fintech innovation-related matters. “We can’t expect that those entities will just figure out their roles and responsibilities by themselves,” she said.

During the session’s Q&A, Kukk commented further on this theme, saying that Estonia – which has a population of just 1.3 million – tends to “lag” larger countries in terms of structures to enable co-working across authorities. “We don’t have such great working groups that deal with fintech topics,” she said.

“We [Estonia] need to add new technological skillsets to our government entities,” Kukk also said. “We need people from the IT sector, we need people with skills in data science, machine learning, AI [artificial intelligence], blockchain. But I still have hope.”

RELATED ARTICLE Estonia to develop first fintech strategy – a report on finance minister Keit Pentus-Rosimannus’s keynote address to the Global Government Fintech Lab

‘It’s about changing mindsets’

Discussion moved beyond structures and skillsets during the session’s Q&A to explore how to overcome the ‘silo’ mentalities frequently found in larger more established authorities.

“The ongoing challenge is trying to figure out where sectoral work stops and where work of the department and cross-sectoral groups begins,” Cullen reflected on her own experiences in Ireland. But the blurring of boundaries has, she said, become a more regular feature of civil service work more broadly. “The most rewarding work is cross-collaboration between units,” she said.

Dietze said there was a growing need for collaboration between different parts of government both within and beyond fintech. “A lot of problems are so complex that, to provide good solutions as a government, we cannot stick to our responsibilities and silos – we have to find new forms of co-operation,” she said.

“We [Germany] are getting better, particularly under the new government,” Dietze said. She mentioned ‘digital fellowships’ and a ‘governmental tech group’ that engages people who are not “civil servants by nature” as two fintech-related developments.

In a similar vein, and in order to foster collaboration, an ‘innovation lab’ has been created within Germany’s finance ministry, she said. “It’s about changing the mindset of how we work and how we would like to work together, to be open enough to work with new tools,” Dietze explained. “It is a room where we can just try new things and approach things with the people who are affected or who would like to contribute.”

Fintech topics’ broad reach

Dietze again emphasised the importance of political will to drive fintech-related structures and developments. “It’s explicitly the will of the new government to have cross-ministerial working groups on certain issues,” she said. “Digital identity is a quite prominent example – it’s obvious that not one ministry can solve this alone.”

Digital ID is a classic case of a fintech-related matter that can straddle many different parts of government. But it is far from the only one.

“The German government is also developing a strategy on start-ups – one of the challenges is how to combine cross-sectoral initiatives with sectoral ones,” Dietze said, adding that EU policies constitute further important pieces of national governments’ increasingly complex fintech jigsaws. “Combining these [different strategies and polices] and adding the best parts to each other is one of the biggest challenges ahead,” she said.

In the meantime, there is also an internal awareness challenge for fintech. “The biggest challenge we face is probably raising awareness with others [public servants] that they are also affected by topics that include ‘digital’ or ‘fintech’ even though their unit is not named anything like that. But that is changing rapidly at the moment,” Dietze said.

Overall government authorities are feeling their way through how to approach fintech’s possibilities and challenges in different ways and at different speeds.

But it is clear that sustained political engagement and enthusiasm is a pre-requisite to ensure department structures are built – and evolve – to keep pace with fintech’s rising prominence.


Watch the session, which was held on 1 June 2022, in full (54min 22sec) =>

Source: Global Government Forum YouTube page


‘Digitalisation given top priority in Germany coalition talks’ ­– our news story (2 November 2021) on Germany’s three-party coalition entering negotiations on the formation of the next government following a preliminary deal that named digitalisation as top priority

‘Ireland’s finance department’s fintech lynchpin: an interview with Karen Cullen’ – our interview with Karen Cullen (16 September 2021)

‘Germany’s public sector and fintech: game on?’ – our analysis (18 May 2021) of how Germany’s public administration is investing in fintech solutions