“Economy Prime expands TAP’s long‑haul offer, giving travellers greater choice between Economy and Business. It’s available on both the A330 and A321LR fleets. The new cabin responds to evolving travel trends by providing comfort, efficiency, and ample space, combined with a seamless customer journey,” said the airline.

“The Economy Prime cabin features 12 seats, located immediately behind Business Class, arranged in a four-seat-per-row configuration. With the side seat always left empty, this layout creates a quieter and more private environment, allowing passengers to enjoy a more relaxed and comfortable experience throughout the flight,” it added further.

Under “Economy Prime,” passengers will benefit from premium airport services designed to make the journey faster, including “Premium Check‑In,” priority baggage handling, “Fast Track Security Access,” and “Premium Boarding.” These elements, together, will contribute to a smoother travel experience from airport arrival to the final destination.

“On board, Economy Prime stands out for its personalised service and carefully selected details that elevate the travel experience. Passengers enjoy a premium main meal with two hot dish options, the possibility of pre‑selecting their meal up to 24 hours before departure, an amenity kit, and a premium pillow. Each element has been designed to provide greater comfort and a heightened sense of care. Economy Prime also offers added value for frequent travellers seeking flexibility and additional benefits. This includes earning more TAP Miles&Go miles, the ability to reschedule flights, and improved refund policies, making it an attractive option within the Economy class,” TAP Air Portugal noted.

With the launch of Economy Prime, TAP Air Portugal, the European country’s leading airline, joins a growing number of carriers upgrading the economy experience by combining comfort, well‑being and value.

TAP, also a member of Star Alliance, has its hub in Lisbon, which is located at the crossroads of Africa, North, Central, and South America. The carrier has become a popular choice for travellers, especially on the route between Europe and Brazil. TAP offers more than 1,000 weekly flights to 75 cities, which include six airports in Portugal, 10 in North America, 14 in Central and South America, 13 in Africa and 38 in Europe (including Portugal).

The Portuguese airline also operates one of the youngest fleets in the world, with all of Airbus’ next-generation NEO aircraft helping the business to maintain its operational efficiency, in addition to reducing emission levels per flight. The airline was ranked among the 20 safest in the world in 2026 (according to Airlines Ratings). TAP Air Portugal has been recognised and awarded as Europe’s Leading Airline to Africa, as well as Europe’s Leading Airline to South America by the World Travel Awards from 2014 to 2025.

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Antony Froggatt, Senior Director for Aviation, Climate, Energy, and Shipping at T&E, a Brussels-based NGO advocating clean transport and energy, told International Finance, “Many forecasters, such as the IMF (If energy prices sustain just a 10% increase over one year, this would add 0.4 percentage point to inflation and slow economic growth by 0.1%-0.2%,) and Fitch, suggest that higher energy prices will negatively affect global inflation and reduce global growth. The extent of these will depend on how high prices get, and how long they remain high.”

Jan Rosenow, Professor of Energy and Climate Policy at Oxford University and Senior Associate at Cambridge University, said, “The short-term pain is real. Higher inflation, squeezed household budgets, and recession risk in energy-intensive economies. But the adjustment mechanisms are also kicking in: strategic reserve releases, demand destruction, and accelerated supply from non-Gulf producers. The deeper concern is duration. A shock that lasts months reshapes investment decisions in ways that a spike lasting weeks does not.”

Clean energy pivot: A Must For Asia Now

In 2026, Asia has become the Europe of 2022. Back then, Russia, in response to the Western sanctions for the Ukraine war, significantly cut natural gas supplies to the continent, resulting in high energy prices and a cost-of-living crisis. Asia, which buys more than 80% of the crude that transits the Strait of Hormuz, is now facing an “energy emergency.”

This could prompt Asia to have a re-look at renewables and initiatives to future- proof both its energy security and economic outlook.

Froggatt commented, “I would argue that renewables have been a necessity for some time, and the economic case for them is even stronger now. As far back as 2020, the International Energy Agency called solar PV the ‘cheapest source of electricity in history’. Since then, the costs of not only renewables (solar and wind), but also storage options, particularly batteries, have continued to fall.”

Rosenow remarked, “Each successive shock – 2022, and now this – makes the economic and security case for domestic clean energy harder to ignore. Renewables are not just cheaper in many markets; they are now the geopolitically safer choice. The question is no longer whether to accelerate the transition but how fast institutions can move.”

EV: The Best Starting Point

Stating that higher fossil fuel prices affect consumers’ cost of living and the balance of payments of importing countries, Froggatt believes episodes like the 1970s global oil price spikes, and the European energy crisis in 2022 will only motivate policymakers to accelerate their efforts to limit their dependence on fossil fuels for economic and supply security reasons.

“We saw this in the EU with the introduction of the ‘Fit for 55’ package in 2022 to accelerate the transition away from imported fossil fuels. However, the majority of these measures will take time to have an effect. If we want to really reduce dependency on fossil fuel, structural changes with new investment are needed, particularly in infrastructure, such as the grids and buildings,” he stated.

Rosenow, on the other hand, remarked, “The pressure is certainly there. Asia bears the heaviest volumetric burden from Hormuz disruptions, and governments that were already energy-insecure are now facing acute supply anxiety. I’d expect faster permitting of renewables, more serious electrification policy, and renewed interest in long-term LNG alternatives – though the pace will vary significantly by country.”

To deal with the “energy emergency,” Asian countries are advocating solutions like a four-day workweek and preventing unnecessary travel to save fuel. This might make electric vehicles more attractive.

Froggatt says, “I would assume that sales will continue to increase. Globally, only around 10% of car sales are electric, but in leading countries, such as China and Vietnam, we are already seeing over 40% of car sales being electric. Consequently, as the cost of electric vehicles continues to fall and charging infrastructure becomes more available and robust, the pace of sales growth will accelerate, especially in an era of high fossil fuel prices.”

Froggatt also pointed out that in Europe, car manufacturers have failed to develop smaller, low-cost EVs fast enough. This is part of the reason why Chinese vehicles are entering the EU market so quickly.

“I think it is incumbent on all car manufacturers to make EVs to meet a variety of consumer requirements, which include those that are most affordable,” he said.

So, Asia should focus on the affordability factor, introducing tax credits for consumers, apart from setting up intensive charging networks.

“There have been significant cost reductions already. And in many markets, EVs are close to or at cost-parity over their lifetime. Further cost reductions are needed to shift the market faster to EVs,” Rosenow noted, while adding, “The underlying drivers – policy support, falling battery costs, expanding model ranges – remain intact. Short-term, high fuel prices actually reinforce the EV value proposition. The risk to growth is on the supply side: critical mineral availability and manufacturing capacity. I don’t see a near-term peak, but the rate of growth will inevitably moderate as markets mature.”

The Continent Holds Promise

As per the International Energy Agency’s (IEA) Renewables 2025 report, two of Asia’s growth engines, China and India, along with the United States and Europe, were responsible for clean energy’s global expansion. Southeast Asia holds promises too. With an estimated 20 terawatts of untapped solar and wind potential (equivalent to around 55 times the region’s current total power capacity), the IEA sees the region as being more than capable of securing its energy security through the renewable route.

“The case for doing so has never been stronger. Energy import dependence is now visibly a security and economic liability, not just an environmental one. Southeast Asian economies, in particular, have strong renewable resource endowments – solar, geothermal, offshore wind – that remain underexploited. The Gulf crisis should be the catalyst for a serious regional rethink,” Rosenow said.

Froggatt too observed, “It is not just countries in Asia that can and should accelerate their use of renewable energy. Without accelerating deployment in the EU, the 2030 renewable energy target of at least 42.5% of energy from renewables will not be met. In developing countries, renewable energy is a way to meet rapidly increasing demand. Governments can take several steps to support the renewable energy sector. They can reduce construction risks and costs through accelerated planning, grants, soft loans, and other measures. Furthermore, they can implement support schemes, such as contracts for difference or feed-in tariffs, that create stable revenues. Governments can also help develop local supply chains, which provide additional price security and create local jobs. Finally, governments can set targets for renewable energy use, which gives confidence to investors.”

While noting that higher rates will raise the cost of capital precisely when deployment needs to accelerate, Rosenow advised, “The policy response matters enormously here: blended finance, public guarantees, and development bank support can reduce the risk premium that makes projects unfinanceable in the private market alone. Countries that get this right will attract investment; those that don’t will fall behind.”

Despite investing heavily in offshore wind, solar, and hydrogen strategies, Japan and South Korea still fulfil a massive chunk of their energy requirements through imported fossil fuels. Both of them are feeling the Hormuz pinch right now.

Rosenow said, “This crisis is a stress test they (Japan and South Korea) were always likely to fail. Both countries have made genuine progress in renewables but remain structurally dependent on imported fossil fuels in ways that leave them exposed to exactly this kind of shock. A serious reassessment of domestic generation capacity is overdue.”

Maybe, it’s time for Japan to shed the ghost of Fukushima.

Froggatt said, “Electricity generated from renewable energy is, under most conditions, far cheaper than that generated by nuclear power. In addition, renewable energy generation is much quicker to build. Therefore, although some countries may look again at nuclear power, I think that the higher costs and slowness to build – especially in countries that don’t already have a nuclear sector – will reduce the number of countries that actually start building nuclear power plants.”

Rosenow concluded, “The political and public calculus on nuclear in Japan was already shifting before this crisis, with several reactors being restarted. A prolonged Gulf disruption accelerates that conversation considerably. Energy security concerns now outweigh, for many policymakers, the post-Fukushima caution. I would expect Japan to move more decisively on restarts over the next few years.”

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The Port of Antwerp-Bruges had up to 27 inbound ships waiting offshore with no possibility of entry, while Zeebrugge saw around 10 vessels held up during peak interruptions of March 19–22, according to port authorities and industry advisories.

Antwerp-Bruges handles about 290 million tons of cargo annually, and the strike has forced ship owners to omit certain port calls on Asia-Europe loops.

Most cargo types that come in through the port are perishables, such as fruits and vegetables, and automotive parts. These cargo types were especially vulnerable, with some shippers warning of production stoppages at Flemish assembly plants if just-in-time parts failed to arrive.

The strike was organised by Belgian pilots and staff at the Zeebrugge traffic centre, which effectively suspended vessel movements in and out of Zeebrugge for several days and forced Antwerp to proceed with seagoing traffic via the North pilot station using only Dutch pilots.

The Belgian National Strike is due to a pension reform proposal and budget cuts. Pilots and maritime controllers argue that reforms will significantly reduce retirement benefits, while the Federal Government frames the measures as fiscally necessary.

The bottleneck, compounded by a national strike in Belgium on 12 March, created a cascading delay across the Scheldt River system and tightened capacity for exporters and importers on the corridor.

Several major lines, like Maersk and MSC, redirected Asia-Europe loops to Rotterdam and Le Havre. The rerouting compressed capacity at those ports and pushed demurrage and storage costs higher across North European gateways.

Bremen and Bremerhaven, further north, have also grappled with congestion pressures, notably in vehicle logistics, where storage at Bremerhaven reportedly neared its maximum capacity amid extended dwell times for road or cargo. With these logistics, the main terminal operator moved vehicles off-site and adjusted rail and interland waterway flows to ease the backlog, but freight forwarders say scheduling remains volatile.

Freight‑data and advisory platforms describe the Antwerp-Zeebrugge strike as one of the most disruptive industrial actions in the region this year, with planners in Europe and Asia now building in extra buffer days for cargo routed via Belgium. The episode highlights how tightly packed Europe’s northern gateways have become, and how quickly local labour disputes can ripple into global supply‑chain lead times.

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Following its acquisition of AXA Investment Managers in June 2025, BNP Paribas Asset Management now manages over 1.6 trillion euro, covering all asset classes and operating with varied strategies and distribution approaches. The acquisition was done to make the BNP Paribas Group the leading manager of long-term savings for insurers and pension funds in Europe, in addition to fulfilling goals like excelling in private asset fund collection and becoming one of Europe’s top providers of exchange-traded funds (ETFs).

By integrating the expertise of AXA IM, BNP Paribas Asset Management, and BNP Paribas REIM, the new platform now offers a diverse range of traditional and alternative assets, enhanced global distribution and improved innovation capabilities.

“The business intends to use the group’s integrated model, including origination and a broad distribution network, and maintains established positions in alternatives, long-term savings, and ETFs. The new strategy centres on four areas: broadening its presence in alternatives, expanding active management and ETFs, growing insurance and institutional partnerships, and increasing its retail and wealth management footprint,” reported Private Banker International.

BNP Paribas’ asset management targets also include more than 5% annual growth in assets under management, along with ensuring a revenue growth of around 4% per year from 2025 to 2030. It further plans to keep operating expenses steady during this timeframe, aiming for a cost/income ratio below 60% by the end of 2030.

According to BNP Paribas Asset Management’s roadmap, its pre-tax income is projected to nearly double by 2030 compared with expected 2025 levels, while Return on Notional Equity is expected to rise from 48% in 2025 to over 65% by 2030. The company expects approximately 150 million euro in revenue synergies and 400 million euro in cost synergies by 2029 through steps such as fund consolidation, platform integration, and efficiency improvements.

While stating about the venture’s plans to use AI across its investment processes and client service operations, BNP Paribas Asset Management CEO Sandro Pierri told the Private Banker International, “BNP Paribas Asset Management is entering a new phase of transformation and growth driven by structurally supportive trends on savings and investments. With our 2030 Strategic Plan, our ambition is to strengthen our position as one of the most powerful European investment platforms.”

“By combining quality and scale across public and private markets and the strength of the BNP Paribas ecosystem, we are uniquely positioned to connect savers and investors with all the opportunities of the real economy. Our mission is clear: deliver sustainable and resilient results for our clients while helping finance the economic transitions shaping the future,” Sandro Pierri concluded.

The post BNP Paribas Asset Management eyes 350-billion-euro net inflows by 2030 appeared first on International Finance.

After World War II and the division into East and West Germany, the country was largely demilitarised and focused on economic reconstruction under the security umbrella of the United States and the Soviet Union, and later under NATO.

With the end of the Cold War, much of Europe came to believe that large-scale continental war was behind them. However, Europeans had a wake-up call, first with the conflicts in the Balkans, followed by the Russian annexation of Crimea in 2014, and the invasion of Ukraine on February 24, 2022. The war in Ukraine is a frozen conflict in its fourth year of devastation.

Europe’s rearmament is being driven by two major forces. Firstly, fear of an expansionist Russia and, secondly, growing doubts about whether the United States, under Donald Trump’s more isolationist approach, would fight on Europe’s behalf.

The age of European pacifism is ending. Germany, Poland, and other states are rearming, while France and the UK remain active military powers. Ukraine, forged by years of war, has become the continent’s most experienced military and a testing ground for 21st-century warfare.

With the US-Israel’s war with Iran, and the closing of the Strait of Hormuz, the great powers of Europe hesitantly find themselves in the Indian Ocean with fleets and submarines.

Great Shadow Of The Military Industrial Complex

The world seems to be in a security crisis. Heads of state are being abducted or assassinated (Venezuela and Iran). The sovereign territory of one nation is being invaded and annexed by another (the Ukraine war). There are accusations of genocide or ethnic cleansing (Israel-Palestine). And, the fight for resources, especially energy, is entering a new phase. Global economies are bracing for $200 a barrel. But even in war, there is money to be made.

Defence spending in EU member states has risen from €218 billion in 2021 to €381 billion in 2025. According to the International Institute for Strategic Studies (IISS), Europe accounts for around 21% of global military spending, which means more than one-fifth of the global military budget is now in Europe (a region that America took great care to ensure doesn’t rearm or militarise for the longest time).

It began as an emergency response to what was happening in Ukraine, a reaction to perceived Russian aggression. It quickly turned into structural rearmament as European governments grew more doubtful about the durability of US security guarantees.

Ursula Von Der Leyen, President of EU Commission, introduced REarm Europe on March 2, 2025, to EU member states. The new REarm Europe/ Readiness 2030 plan is an €800 billion framework in which members will push defence spending from 1.9% of their GDP in 2024 to 3.5% by 2030. The EU initiated a €150 billion loan programme titled ’SAFE’ (Security Action for Europe) to support joint weapons procurement, with projects generally requiring that no more than 35% of component costs come from outside the EU, the EEA-EFTA states, or Ukraine.

Additionally, €1 billion will be allocated to the European Defence Fund in 2026 for research and development, primarily for hypersonic missile defences, drone swarms, and next-generation tanks.

Rheinmetall CEO Armin Papperger told Reuters: “A new era of rearmament has commenced in Europe,” and that it brings “unprecedented growth opportunities” for the company.

Not too long ago, defence contractors in Europe struggled to convince governments to increase the budget and procurement. Now, supply chains and even politics can’t seem to keep up with the demand.

The Doves Slowly Turn into Hawks

The EU Parliament and think tanks believe that the EU’s defence budget has risen 63% since 2020. The estimate for 2025 was €381 billion, amounting to about 2% of the bloc’s GDP.

The EU spent around €88 billion in 2024 on equipment procurement. This number was at €130 billion in 2025, while R&D is said to have risen from €13 billion to €17 billion at the same time.

There have been accusations about Germany underspending for many years. Understandably so, because German militarisation was more frightening than a stingy defence budget for most of the world. However, Germany is now the biggest spender in Europe, and has answered its critics by sharply expanding its defence budget, with spending projected to rise to €162 billion by 2029. This would represent approximately 3.5% of GDP.

The Baltic and Scandinavian states are also splurging money to harden NATO’s eastern flank. They are especially energised because they share land borders with Russia.

On February 15, Ursula Von Der Leyen tweeted: “We need a surge in defence spending. Europe must bring more to the table. I will propose to activate the escape clause for defence investments. It will allow member states to substantially increase their defence expenditure, in a controlled and conditional way.”

There is a ’national escape clause’ in the bloc’s fiscal rules, which allows for an additional 1.5% of GDP to be spent on defence without budgetary constraints. Furthermore, the SAFE facility enables €150 billion in joint borrowing to finance cross-border projects and encourage European governments to purchase European weapons rather than ammunitions, drones, tanks, and missiles from the United States, Israel, or Japan.

The bond markets and investors are happy. Not so long ago, environmental, social, and governance (ESG) portfolios did not include defence. But now, because of hard security shocks, defence has been rebranded as a public good on par with environmental conservation.

Europeans, once again, are beginning to see war as an inconvenient necessity rather than an evil to be avoided.

War Is Good Business

Armin Papperger wrote on the company’s official X account: “Defence is now by far the most dynamic sector of German industry.”

Europe’s Aerospace and Defence Index has surged over the past year, reflecting investor enthusiasm for the sector. Fitch Ratings estimates that the eight largest defence companies are seeing at least a 15% increase in demand from 2024, and their combined cash flow is at a record-breaking €8 billion.

Germany’s Rheinmetall is acquiring US-based Loc Performance Products for $950 million. In France, Safran is buying the AI defence firm Preligens for around €220 million so that it can have better surveillance and data analysis capabilities.

Even startups like the Europe-based Helsing is raising €600 million in a Series D round for their state-of-the-art drone and electronic warfare systems, which are AI-operated.

Investment managers and law firms are jubilant as SAFE brings cheap credit to the European military-industrial complex, with experts expecting increased funding for missiles, armoured vehicles, and aircraft. Resources will also be allocated to neotechnologies, such as quantum secure communication, space-based surveillance, and autonomy.

This trend is projected to drive countless cross-border mergers and joint ventures well into the 2030s.

Too Slow To Make Bombs

Europe is throwing money at the problem, hoping to be prepared for an inevitable showdown with Russia. But money can’t make missiles, shells, and drones by itself. European factories are ramping up production, but there are bottlenecks and serious limitations to output capacity.

Economists at BNP Paribas believe that the bloc can transform its underutilised industrial capacity, which was once used for automotive and adjacent sectors, for defence production. The defence output would be raised by 0.5 percentage points to annual GDP growth in the mid-2020s. That growth is not just going to come from weapons, but also from metals, electronics, and machinery required to make them.

Additionally, the SAFE initiative, which demands procurement from within Europe, and investor enthusiasm might revitalise factories that were once closed for defence manufacturing.

The European Defence Fund has grand plans, but full-scale production won’t start until early 2030, even though Ukraine is running out of ammunition and drones at an unprecedented rate.

Europe is trying to buy off-the-shelf systems while setting up its own, while also scaling up its existing lines.

The Side Effects Of Defence Spending

There are conflicting opinions from economists on how increased defence spending will affect the economy.

Filippo Taddei, senior European economist at Goldman Sachs, told Reuters that extra defence spending will support European growth, in particular, support European industry at a time when they are particularly struggling.

Carsten Brzeski, ING’s global macro head, said: ’increased defence expenditure results in a negative multiplier effect on growth’ in the short term.

Klaas Knot, head of the Dutch central bank, said, “A temporary fiscal exemption for higher defence spending is justifiable, but warned that public debt in the EU remained excessively high.”

If you focus too much on war, you risk deprioritising other sectors (essential sectors such as education and healthcare). There is also the risk of inflation and higher interest rates.

Europe is infamous for its expensive welfare system and green transition programmes. If they pile up military outlays on top of that, the continent could see a backlash from voters who struggle to make ends meet.

There is also a lot of debate about the inequality within the bloc. Bruegel and other think tanks analysed ’Rearm Europe’, and believe that the move would largely benefit national governments instead of the EU as a whole. For example, rich nations like Germany and the Netherlands will borrow cheaply and aggressively invest in weapons manufacturing, while Eastern and Southern Europe will find themselves in unsustainable debts, or incapable of militarising at a pace on par with their wealthy counterparts.

Europe’s political and cultural rebranding of making defence an ESG-compatible investment is still on the debate floor.

Institutional investors are arguing that supplying democracies with weapons to defend against tyranny is ethical and consistent with the EU’s vision.

But, many are afraid of dual-use technologies that will later be exported to poor countries with questionable human rights records. There is already a lot of uproar towards sending weapons to Saudi Arabia and Israel.

The ethical complexity of the issue is likely to affect industrial growth, even though the weapons manufacturing sector is seeing a boom.

An End To Reliance On External Security Umbrellas

Europe is beginning to understand that pacifism and reliance on external security umbrellas might not cut it. True safety and security come from self-reliance. The wars in Ukraine and Russia are stark reminders of a return to armament.

Despite throwing money at the problem and having the potential to have outstanding armies by the end of the decade, there are still several challenges that governments must navigate.

For starters, there are the industrial bottlenecks. Not all the money in the world can create missiles, artillery, and drones instantly. There are supply chain problems and production limits that are to be overcome gradually.

There is also the economic inequality and in-bloc politics that might arise because of a re-armed Europe, as Eastern and Southern states might find themselves drowning in debt, while nations like Germany and the Netherlands might make a profit through the rapid militarisation race.

Europe has long positioned itself as the most ethical society on earth. Making defence an ESG-compatible public good is highly controversial in European societies, and many see it as a means to pour government funds into the military-industrial complex.

Regardless, money is being poured into the military establishment, factories are reopening, and war looms on the horizon.

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This comprehensive research report provides an exhaustive analysis of the current state of Financial Crime Compliance. It synthesises the seismic operational impacts of the European Union’s implementation of the 6th Anti-Money Laundering Directive and the activation of the Anti-Money Laundering Authority in Frankfurt. It scrutinises the United Kingdom’s controversial centralisation of professional services supervision under the Financial Conduct Authority. Across the Atlantic, it dissects the aggressive extraterritorial reach of the US Department of Justice, exemplified by the historic asset cap and multi-billion-dollar penalties levied against TD Bank and the criminal convictions of cryptocurrency giants like KuCoin.

Furthermore, this report analyses emerging laundering typologies that exploit the very digitalisation intended to modernise finance, including the misuse of white-label banking infrastructure, the layering capabilities of virtual IBANs, and the terrifying efficacy of AI-enabled deepfake fraud. These vectors have necessitated a complete architectural overhaul of transaction monitoring systems, forcing institutions to abandon static rule-based systems for dynamic, AI-driven behavioural analytics. The “compliance-as-an-afterthought” model, which fuelled the fintech unicorn boom of the 2010s and early 2020s, has effectively collapsed. The forced exit of founders from major neobanks like N26 and the bankruptcy of embedded finance providers like Railsr demonstrate that regulatory resilience is now the primary determinant of commercial survival.

EU’s regulatory revolution

The operationalisation of the EU’s AML Package in 2024 and 2025 represents the most significant restructuring of the bloc’s financial defence architecture since the introduction of the Euro. Now comes the new way of handling rules, with fewer top-down orders and one clear book for everyone. It means firms across Europe face different demands than before, shaped by deeper political goals. The aim? To avoid gaps so large that they let trouble sneak through, just like what happened at Danske Bank.

Nowhere else does history shift so clearly. The AMLA era replaces the old ways of isolated national bodies working apart. Based in Frankfurt, this authority is moving fast, staffing up through 2027 while gaining real oversight tools by 2028, especially for higher-risk cases. Unlike the EBA before it, which shares advice but lacks enforcement teeth, here power flows directly, bypassing local authorities entirely. Straight oversight goes to selected risky overseas finance units, setting strict rules and major monetary penalties that target them specifically, blocking any attempt to dodge through loopholes.

Across the wider market still within national oversight, AMLA takes on a firm monitoring role, working closely with state agencies to maintain uniform enforcement of the Single Rulebook. Its funding structure reflects self-sufficiency in operations, shielded from fluctuations in political funding allocations.

From 2028 onwards, approximately 70% of its €92 million annual budget will be funded by fees levied directly on the obliged entities it supervises. The fee structure ensures that institutions creating the highest systemic risk bear the financial burden of their supervision.

The legislative twin pillars, the 6th Directive and the AML Regulation, have harmonised definitions and drastically expanded the perimeter of regulated activities. The 6th Directive codifies a unified list of twenty-two predicate offences across all member states, now explicitly including cybercrime, environmental crime covering illegal logging and waste trafficking, and tax crimes. For multinational corporations, this harmonisation removes the dangerous ambiguity where an act considered a predicate offence in one jurisdiction might not have triggered money laundering reporting in another.

The AML Regulation significantly broadens the definition of “obliged entities,” those required to perform Customer Due Diligence and file Suspicious Activity Reports. The regulatory perimeter now captures crypto-asset service providers, high-value goods traders in precious metals and cultural artefacts, professional football clubs and agents, and crowdfunding platforms facilitating peer-to-peer financing. Transparency of beneficial ownership remains a cornerstone of the EU strategy, with the new framework mandating a unified ownership threshold of 25%. A critical “risk-based” provision empowers the European Commission to lower this threshold to 15% for high-risk sectors. The directive mandates the interconnection of national beneficial ownership registers via a central European platform, closing the loophole whereby cross-border corporate structures could obscure the Ultimate Beneficial Owner. To curb the anonymity provided by physical currency, the AML Regulation introduces a Europe-wide cap of €10,000 on cash payments in business transactions.

The 6th Directive introduces stringent corporate liability provisions that directly impact the C-suite. Legal persons can be held criminally liable if a “lack of supervision or control” by a person in a leading position made the money laundering possible. For Chief Financial Officers and Corporate Treasurers, the expansion of definitions regarding aiding and abetting means executives can be prosecuted for facilitating laundering through negligence or wilful blindness. The requirement to verify beneficial ownership for all suppliers and partners necessitates a massive overhaul of vendor management systems.

UK’s supervisory consolidation

While the European Union centralises authority in a new supranational body, the United Kingdom is dismantling the fragmented supervisory regime criticised for its inefficiency. The government’s decision to appoint the Financial Conduct Authority as the Single Professional Services Supervisor marks a watershed moment for lawyers, accountants, and trust and company service providers. The move represents a fundamental shift away from professional self-regulation toward a statutory, state-controlled model of AML oversight.

The catalyst for this radical reform was the consistent underperformance of the Professional Body Supervisors, the twenty-two self-regulatory bodies responsible for overseeing AML compliance in the legal and accountancy sectors. The Office for Professional Body Anti-Money Laundering Supervision issued a damning report in September 2024 that effectively sealed the fate of the self-regulatory model. The report found that none of the assessed supervisors were fully effective in all areas of supervision; the majority showed no material improvement, with some even regressing; and there was systemic reluctance to issue fines or take enforcement action. This highlighted the inherent conflict of interest between the bodies’ representative roles and their supervisory duties.

Under the new SPSS model, the FCA will assume sole responsibility for AML supervision of professional services firms, with full operational transfer projected by 2028. The legal profession has vehemently opposed this move, viewing it as an erosion of professional independence. Concerns centre on whether a statutory regulator rooted in financial markets culture will respect the nuances of Legal Professional Privilege, the significant fees the FCA is expected to levy, and the clash between the FCA’s “rules-based” approach and the “principles-based” regulation to which the legal sector is accustomed. However, the government’s stance remains firm. The risk of professional enablers facilitating high-end money laundering outweighs the preference for self-regulation.
US’ enforcement doctrine

The United States is enforcing the existing rulebook with unprecedented aggression. Enforcement actions of 2024 and 2025 have shattered the notion that global banks are “too big to jail.” The focus has shifted from monetary penalties to structural constraints that threaten the very growth of non-compliant institutions. The guilty plea by TD Bank in October 2024 serves as a definitive case study for the modern AML failure. The bank agreed to pay over $3 billion in penalties to resolve investigations by the DOJ, the Financial Crimes Enforcement Network, and the Office of the Comptroller of the Currency.

The TD Bank case was a systemic collapse of defences, facilitated by a corporate culture that prioritised speed and cost-cutting over compliance. Court documents revealed laundering networks that operated with impunity, including one that physically dumped piles of cash on bank counters in Queens and a sophisticated network that utilised the bank to withdraw funds via ATMs in Colombia through complicit bank employees. The DOJ explicitly cited the bank’s prioritisation of growth over compliance controls, noting that for nearly a decade, the bank failed to update its transaction monitoring scenarios.

While the $3 billion fine was historic, the arguably more damaging penalty was the asset cap imposed by the OCC, preventing TD Bank’s US retail subsidiaries from growing their assets beyond the October 2024 level of $434 billion. The penalty structure represents a profound shift in regulatory strategy, as fines can be absorbed, but asset caps stagnate the business, depress stock value, and invite shareholder litigation. For a bank, the inability to grow its balance sheet is a slow-motion death sentence for its strategic ambitions. The US approach has set the tone for global enforcement, with the DOJ and FinCEN targeting not just institutions but individuals and infrastructure, with reach extending far beyond US borders.

The crisis of architecture

The years 2025 and 2026 have been a reckoning for the fintech sector. The “move fast and break things” ethos has collided violently with AML regulations, exposing vulnerabilities inherent in Banking-as-a-Service and white-label models. The result has been bankruptcies, license revocations, and forced leadership changes. White labelling allows non-bank entities to offer financial products using the license and infrastructure of a regulated provider. An EBA report published in October 2025 identified this model as a critical money laundering vulnerability, with risk stemming from the structural disconnect between the customer-facing brand and the regulated entity holding the license.

The bankruptcy of Railsr remains the cautionary tale of the sector. Railsr’s subsidiary, PayRNet, had its license revoked by the Bank of Lithuania in mid-2023 for serious AML violations, including the failure to safeguard client funds and inadequate due diligence. The revocation revealed that PayRNet had effectively lost control of its resellers and could not identify the end users of its virtual IBANs, allowing illicit flows to move unchecked through its rails.

German neobank N26 provides a vivid case study in the friction between hyper-growth and regulatory containment. Following repeated AML failures, the German regulator BaFin imposed a draconian cap on new customer acquisitions in 2021. The cap was lifted in mid-2024, but by late 2025, BaFin had reimposed restrictions, specifically banning N26 from issuing mortgages in the Netherlands due to continued compliance deficiencies. The sustained regulatory pressure culminated in a governance crisis, with investors pushing for the exit of the bank’s founders by early 2026, marking the end of the founder-led era.

The digital frontier

By 2026, the cryptocurrency landscape had transformed significantly compared to the chaotic environment of 2020. The introduction of the Markets in Crypto-Assets (MiCA) regulation in Europe, along with the global implementation of the Travel Rule, tightened privacy measures. In the United States, there was a strong crackdown on cryptocurrency exchanges through criminal cases based on financial laws. One notable exchange, KuCoin, took responsibility in early 2025 for managing unreported funds and faced charges related to the Bank Secrecy Act. The total penalties amounted to nearly $300,000,000. A federal court case revealed that KuCoin operated without the necessary permissions, marketing itself to American users while completely bypassing identity verification checks. Labelled as a “No-KYC” exchange, it allowed anonymous traders to participate from across the country. As a result of circumventing regulations, more than five billion dollars flowed in from unclear, potentially criminal sources.

A penalty of $100 million handed to BitMEX in 2025 marks another shift toward personal responsibility, with its founders ordered to serve time in a criminal capacity. It was determined that the platform deliberately ignored anti-money laundering requirements to increase earnings, handling vast sums, trillions, without any customer verification. Even as traditional exchanges grow stricter, new paths for illicit finance begin to take shape. Funds tied to Tornado Cash face US restrictions, which weakened their purpose, since major trading platforms now reject deposits linked to named mixing routes. Instead of vanishing, privacy altcoins such as Monero lose access to major platforms, shrinking the trader activity needed for broad-scale illicit flows. Lurking beneath old tactics, launderers now lean on “chain hopping,” shifting value across network borders using the latest bridge technology. These moves blur transaction links simply because paths between blocks go unnoticed for longer.

By 2026, the Financial Action Task Force’s “Travel Rule” will have become a global operational standard. In the EU, regulations mandate that all transfers of crypto-assets must be accompanied by identifying information of the originator and beneficiary, effectively applying SWIFT-style wire transfer transparency to the blockchain. This has forced Virtual Asset Service Providers to implement complex messaging protocols, creating a closed loop of regulated entities.

The new typologies of financial crime

The 2026 threat landscape is defined by the abuse of complex payment infrastructure and the weaponisation of Generative AI. Virtual IBANs are routing numbers that redirect payments to a master physical account. While legitimate for treasury management, they are a potent tool for money laundering. A criminal opens a master account with a fintech company, then generates hundreds of virtual IBANs, assigning them to shell companies. Funds flow into these virtual accounts and are instantly commingled in the master account, obscuring the origin from transaction monitoring logic. The AML Regulation now requires issuers to link every virtual IBAN to the underlying master account in centralised registries.

The “Deepfake CFO” scam in Hong Kong, which resulted in a $25 million loss, stands as the grim milestone of AI-enabled fraud. Fraudsters used deepfake technology to recreate the company’s CFO and other colleagues in a “live video conference.” By 2026, over 42% of fraud attempts are AI-driven, with deepfake “injection attacks” increasing by over 2000%. This has rendered simple video KYC obsolete, with financial institutions rushing to implement passive liveness detection and biometric analysis capable of spotting microscopic artefacts left by generative AI.

Strategic outlook

The EU Single Rulebook and the UK’s SPSS model mean that regulatory arbitrage within Europe is effectively dead, with firms needing to adopt a “highest common denominator” approach to compliance. The extension of criminal liability to executives and the aggressive prosecution of founders means that AML compliance is a direct responsibility of the Board and C-suite. Legacy systems that cannot handle virtual IBAN transparency or detect AI deepfakes are now existential vulnerabilities, with investment in RegTech no longer an IT upgrade but a license to operate. The era of “growth at all costs” has been superseded by the era of “compliant growth or no growth.” The regulatory perimeter has expanded to encircle the entire digital economy, and the penalties for stepping outside it have become existential. For financial institutions and their leaders, the message from regulators in Frankfurt, London, and Washington is unified. Compliance is the new currency of trust.

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The latest PIPE deal values Einride at a pre-money valuation of USD 1.35 billion. The figure, despite being down from the USD 1.8 billion figure initially attached to the SPAC deal, still shows rising investor appetite towards the Swedish start-up. The PIPE also exceeded the company’s earlier target of raising up to USD 100 million. The venture has secured around $213 million from this particular transaction alone, including the previously announced crossover financing capital of USD 100 million.

“The SPAC, which will see Einride trading on the New York Stock Exchange (NYSE), had been expected to deliver roughly USD 220 million from Legato’s trust account. With the addition of the USD 113 million PIPE, the companies now project total gross proceeds of about USD 333 million before redemptions and expenses, though they say they may seek additional capital before closing. The proceeds will support Einride’s technology roadmap, global expansion, and autonomous deployments in North America, Europe, and the Middle East,” reported TechCrunch.

The Breakthrough ‘Pod-like Truck’ Concept

Since its formation in 2016, Einride’s technology has continually improved, driven by a single goal: making the transport and logistics sectors safer, cleaner, and more reliable. As of March 2026, apart from operating a fleet of 200 heavy-duty electric trucks in Europe, North America, and the UAE for companies like Heineken, PepsiCo, Carlsberg Sweden, and DP World, Einride has also implemented limited deployments of its autonomous pod-like trucks with customers, including Apotea in Sweden and GE Appliances in the United States.

Einride has built its own digital platform, combining cabless autonomous fleets, software, and human-driven electric trucks, in order to decarbonise, automate, and secure global supply chains. The start-up’s end-to-end autonomous freight ecosystem has been designed for real-world operational needs, whether serving industrial shippers, retailers, ports, or logistics hubs. The venture’s vehicle-agnostic autonomous service further integrates across OEM vehicles and fleet operations, from commercial freight to specialised civilian applications.

The autonomous platform, from assessment to live autonomous freight, has been built in a structured and scalable manner, suitable for immediate commercial impact upon deployment. Developed in-house, Einride’s core software, senses the environment, makes driving decisions, and controls the start-up’s pod-like trucks.

“We identify high-volume, repetitive routes where autonomy delivers the strongest utilisation, cost efficiency, and operational stability. Infrastructure, site interfaces, traffic conditions, and regulatory pathways are evaluated to define a clear deployment plan and timeline. Routes are digitally modelled and stress-tested before launch, reducing risk and protecting service levels from day one. Vehicles operate under permit and integrate into live freight flows, with real-time oversight and defined response protocols. Operations expand across vehicles, lanes, and operating hours – compounding cost efficiency, capacity, and network resilience,” Einride explained its platform.

By going autonomous, Einride is helping the transport and logistics industries increase their operational savings, especially in terms of electrification and higher vehicle utilisation. Industry players are also minimising risk in repetitive, high-frequency cargo flows by reducing reliance on in-cab drivers in complex environments. Apart from achieving zero tailpipe emissions, the start-up’s pod-like trucks also address critical issues such as driver shortages, shift constraints and labour volatility, as clients can seamlessly scale transport volumes beyond traditional shift structures to meet fluctuating cargo demands.

Making Road Freight Completely Electric

Einride’s end-to-end service takes care of everything from drivers, routes, trucks, to charging. The start-up’s in-house software and most importantly, its Saga AI, connect cargo shipments, vehicle charging and driver data to optimise every part of its clients’ operations, with the philosophy of “better data leads to better decisions.”

Saga AI’s planning feature helps electric trucks move 85% of the goods, covering 54% of the distance, compared to 57% and 32% with the traditional one-truck-per-route setup, by aligning routes, operations and charging points to ensure electric transport performs from day one.

Once Einride’s clients inform the start-up with details like cargo destinations, cargo types and their emissions goals, the venture prepares a custom transformation plan including vital insights and a roadmap for the clients’ future freight needs. The solution is all about making the electric switch cost-efficient and scalable, with Einride’s software analysing truck utilisation, driver performance, and shipment demands, ensuring the freight needs are planned with precision, following which the right vehicles get deployed, while integration with the companies’ existing operations seamlessly takes place.

How does Einride do it? By using its in-house algorithms, which process vast amounts of data, from transportation demand and driver information to vehicle and charging telematics, before generating operational roadmaps. The same intelligent tech also performs emission reporting (by bringing fleet, emissions, and energy insights into one place) to power better performance, compliance, and industrial subsidy access. The solution also crunches the charging data before suggesting the best charging infrastructure for the client’s venture and its fleet.

Talking about Einride’s charging network, it differentiates itself from its industry peers, by combining smart energy, smart usage, and smart locations under one platform. The software connects data from vehicles, routes, and energy systems to optimise charging solutions based on the clients’ needs for powering their heavy-duty commercial freight.

“Whether a stop is at an Einride Smartcharger, a private install, or a trusted partner, custom routes optimise national and international transport flows — including co-transport and third-party charging. All to keep operations running smoothly, energy included. Charging is a part of the Einride platform. The integrated software (Saga AI) gathers freight data to create a charging solution that understands your schedule and routes. Think of it as trucks and systems speaking with each other to get where they need to be in the best way possible,” the start-up commented.

Consolidating its position as Switzerland’s fastest-growing charging network, Einride is building the infrastructure’s next-generation version, with each station being strategically placed in high-capacity hubs along major transport corridors. Live with a major grid in Sweden, the network is well on its way to redefining Europe’s EV charging playbook.

And let’s conclude by talking about Saga AI, the intelligent operating system acting as Einride’s engine room, by being the connecting glue between autonomous trucks, electric vehicles, and charging stations. The solution is managing, operating and optimising road freight by continuously collecting data from shipments, vehicles, and charging.

Image Credits: Einride

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Google’s Threat Intelligence Group (GTIG), partnering with Mandiant (a subsidiary of Google Cloud and a premier cybersecurity firm specialising in threat intelligence, incident response, and managed defence) and others, ended up exposing Chinese state-backed organisation UNC2814’s spy operations. The group has now been classified as an Advanced Persistent Threat (APT).

In the most recent campaign, the organisation used GridTide, a backdoor malware that had never been seen before and used the Google Sheets API for C2 infrastructure. The backdoor blends with regular company traffic and causes no concerns because it sends HTTPS queries to authentic Google infrastructure rather than connecting to a distant server to obtain commands and steal data.

Every command is kept in a spreadsheet cell within an attacker-owned document. The malware periodically examines, decodes, and executes the encoded instructions that the operators inject into designated rows or cells.

Exfiltrated data may occasionally be written back into the sheet. GTIG stated that it did not see any examples of data exfiltration. With reports of its activity dating back to 2017 or potentially earlier, UNC2814 is a somewhat well-known threat actor.

Google terminated all of the attackers’ authority over Google Cloud Projects as part of the disruption operations, cutting off their ongoing access to GridTide-compromised environments. They restricted access to the Google Sheets API requests, disabled attacker accounts, and located and stopped all known UNC2814 infrastructure. Lastly, it published a list of IoCs connected to the UNC2814 infrastructure that has been operational since at least 2023.

The campaign started in 2023 and affected at least 53 organisations in 42 countries. Google suspects that UNC2814 is present in at least 20 more countries. Most of Latin America, Eastern Europe, Russia, parts of Africa, and parts of South Asia seem to have been hit. Except for Portugal, Western Europe is mostly unscathed. The United States was not touched as well.

The activity is distinct from separate high-profile, telecommunications-focused Chinese hacking activity tracked as “Salt Typhoon,” Google told Reuters. That campaign, which the US government has linked to Beijing, targeted hundreds of American organisations, in addition to prominent political figures.

Chinese Embassy spokesperson Liu Pengyu, while reacting to the news, said, “Cybersecurity is a common challenge faced by all countries and should be addressed through dialogue and cooperation. China consistently opposes and combats hacking activities in accordance with the law, and at the same time firmly rejects attempts to use cybersecurity issues to smear or slander China.”

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Heathrow Airport, the busiest airport in Europe by passenger volume in 2024, will begin construction of a new runway to “unlock even more of that connectivity, trade and economic growth for the United Kingdom,” according to a statement from the airport’s chief executive, Thomas Woldbye.

Istanbul Airport took second position, as it handled 84.4 million passengers last year, slightly less than Heathrow Airport’s 84.5 million. In December alone, nearly 7.2 million travellers passed through the hub. The good news comes amid the Keir Starmer government recently authorising the airport’s 49-billion-pound (USD 66 billion) expansion plan, as authorities endured years of legal struggle regarding the project.

While Heathrow Airport holds the annual record, Istanbul Airport actually surpassed Heathrow Airport in monthly passenger volume for much of the second half of 2025. This shift was driven by Istanbul Airport’s implementation of a world-first “triple runway” simultaneous operation system in April 2025, which increased the facility’s hourly capacity from 120 to 148 flights.

Unlike Heathrow Airport, which is physically limited by its current two runways and a 1,300-flight-per-day cap, Istanbul Airport’s purpose-built infrastructure allowed it to handle over 272,000 passengers on a single day in July, breaking the previous European daily record held by Heathrow.

This creates a narrative of “Old World vs New World” aviation, where Heathrow’s expansion is a race to regain a structural advantage that Istanbul Airport already possesses. Heathrow Airport claims that the project will boost capacity to up to 150 million passengers annually.

In Europe, where nations are divided between efforts to cut greenhouse gas emissions and the demands of a vital industry whose demand has skyrocketed since the COVID-era lockdowns, this would be an uncommon growth.

With flights anticipated to begin within ten years, the runway would cost 21 billion pounds. The remaining privately funded investment would be used to modernise and expand the airport.

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As one of Europe’s leading digital banks, Bunq hoped for quick approval when it applied for a US banking licence in 2023. One year later, the Amsterdam-based fintech withdrew that application due to a misalignment between American and Dutch regulators. Now Bunq is trying a different route. In April 2025, it filed for a US broker-dealer licence, which would allow its American users to invest in stocks, mutual funds, and ETFs.

This two-step approach is only the first move in an ambitious American adventure, a Bunq spokesperson says, adding that the company will “start by making investing effortless and fully transparent, with no hidden fees.” It’s possibly a jab at some US competitors’ less transparent practices.

Prioritising growth above all else

Bunq is not the only European digital bank casting eyes across the Atlantic. UK-based neobanking leaders Revolut and Monzo have also been plotting entry into the US market, riding a wave of renewed investor interest following a post-pandemic fintech funding crunch.

The strategy is a no-brainer for these firms, given slowing customer acquisition in Europe after a decade of breakneck growth and intensifying competition that has compressed margins. After years of explosive expansion in their home markets, growth at home has cooled.

A sense of urgency now permeates the fintech sector as it matures, and it’s expected that only a few digital banks (also known as neobanks) will ultimately dominate globally. Many players have spent years in the red chasing scale, but now some are finally in the black. For example, 2024 was Bunq’s second consecutive year of profitability, reporting €85.3 million net profit (up 65% from 2023’s €51.6 million).

Bunq achieved this feat by capitalising on higher interest rates (earning yields on customer deposits) and maintaining lean operations. It’s a trend mirrored by peers like Germany’s N26 and the United Kingdom-based Monzo, which have also edged closer to breakeven as investor pressure to show viable business models mounts.

One persistent problem for neobanks is that they lag far behind traditional incumbents in the quintessential banking business, i.e., lending. These fintech upstarts have relatively small loan books, so they generate far less revenue from credit products than established banks.

Instead, much of their income comes from sources like interchange fees on card payments, subscription fees for premium accounts, and other transactional charges. This model worked during growth phases, but as expansion slows, the limitations become clear, especially since interchange fees in Europe are capped at low levels (around 0.3–0.4% of a transaction), unlike in the United States, where they average closer to 2%. In other words, European neobanks have been operating with thinner margins on payments and must convince investors they can find new revenue streams.

Compounding these business challenges, funding conditions have tightened, and regulators have toughened up in Europe, creating a more hostile environment for fintechs. Venture capital investment in European fintech plunged in 2023 (falling about 65%, from $24 billion in 2022 to just $8.4 billion in 2023), leaving many startups strapped for cash and under pressure to become self-sustaining.

Navigating the regulatory maze

Obtaining a full banking licence in the US requires approval from multiple authorities, as well as securing federal deposit insurance and meeting strict capital requirements. In practice, a foreign fintech that wants to operate nationally as a bank might need a US banking charter that can be federal (through the Office of the Comptroller of the Currency) or state-by-state. This might include obtaining FDIC (Federal Deposit Insurance Corporation) deposit insurance to protect customers’ deposits, securing a state money transmitter licence, and demonstrating sufficient funding and compliance.

This multi-layered regime creates a regulatory minefield for newcomers. It’s no wonder that rising American economic nationalism adds an extra barrier, warns Hatami, “Current instability in engagement with foreign providers is possibly making the rollout of a European fintech in the US problematic.” In short, even if laws are becoming more fintech-friendly in theory, foreign applicants may face subtle protectionist scepticism.

Dealing with the American payment infrastructure can also be tricky for entrants accustomed to Europe’s more modern systems. In Europe, neobanks benefit from near-instant interbank payment networks (such as SEPA Instant) that let customers move money seamlessly 24/7.

By contrast, US banks have been slower to adopt real-time payments, and the Federal Reserve’s new FedNow instant payment system launched in mid-2023; the decades-old reliance on paper cheques persists.

European fintech executives who view the United States as one single market often struggle, notes Dave Glaser, CEO of US payments firm Dwolla. Indeed, past attempts by European neobanks to crack the United States have proved traumatic. Monzo withdrew its US banking licence application in 2021 after regulators signalled that approval was unlikely.

Berlin-based neobank N26 also pulled the plug on its US operations in 2021, having failed to gain traction, in part because it never managed to offer its lucrative premium accounts or bring its full feature set stateside.

Revolut, meanwhile, has been stuck in regulatory limbo; a long delay in obtaining a British banking licence made pursuing a US banking licence impractical until recently. Without their own American banking charters, these digital banks have been unable to offer credit products or hold customer deposits directly, limiting their revenue opportunities in America.

“Previous attempts faltered due to underestimating the complexity of US regulation, overestimating brand pull, and launching without a compelling local value proposition,” observes David Donovan, head of financial services for North America at consulting firm Publicis Sapient.

For fintechs that cannot obtain their own banking charter, the shortcut into the market is partnering with an American bank, a model known as Banking-as-a-Service (BaaS) or using a sponsor bank. Monzo, for example, has partnered with Ohio-based Sutton Bank to hold American customer deposits, allowing Monzo to offer accounts without a licence of its own.

Similarly, smaller British fintech Cleo (which provides a personal finance chatbot) entered the United States by teaming up with community banks (Thread Bank and WebBank) and now serves over seven million customers in North America. These arrangements let fintechs piggyback on a licensed bank’s infrastructure.

However, the compromise is that the partner bank typically retains a slice of the interchange fees and imposes its own compliance requirements. Given that interchange fees on the American credit and debit cards are significantly higher than in Europe, those fees are a major revenue source, and splitting them “eats into your margins,” notes Stephen Greer, a banking industry consultant at SAS.

Recent events have also highlighted the risks of the partnership route. In early 2024, the American fintech world was rocked by the collapse of Synapse, a once-promising BaaS (Backend as a Service) provider that sat in the middle between fintech apps and their partner banks.

Synapse’s “gross mismanagement” of customer funds led to around $85 million going missing and the firm filing for bankruptcy. One of Synapse’s key partner institutions, Evolve Bank & Trust, became embroiled in the fiasco as customers of various fintech apps lost access to their deposits. Regulators have since intensified scrutiny of these bank-fintech partnerships.

The US Office of the Comptroller of the Currency (OCC) and the FDIC have even solicited public input on tightening oversight of BaaS arrangements, and the FDIC proposed new rules requiring daily reconciliation of funds between tech firms and banks to prevent another Synapse-style incident. The lesson for ambitious neobanks: hitching your American expansion to a partner bank can carry significant compliance and reputation hazards if that partner or an intermediary mismanages funds.

Given these constraints, more ambitious European neobanks have decided that going it alone with a full licence is a bet worth taking, despite the up-front pain. Revolut, for instance, still offers its cards and accounts in the US via a partner (Missouri-based Lead Bank) and holds a US broker-dealer licence, but it has made clear it is pursuing its own US banking licence. Bunq also views the broker-dealer move as a prelude to eventually launching a fully licensed US bank of its own.

“The best strategy for a European fintech is to create a US entity and nurture this by tapping into the US investor markets, from venture capital all the way to IPO. And to play down its European roots as far as possible,” Hatami advises.

In other words, treat the US expansion almost like founding a new company, build a dedicated local team and product, raise money from American investors who understand the market, and don’t lean too heavily on your European brand if it doesn’t resonate locally. The subtext is that American consumers (and regulators) might be more receptive if a service feels homegrown rather than an import.

Cut-throat competition in the USA

Even with a charter in hand and funding secured, European neobanks will land in a fiercely competitive arena. The US retail banking market is crowded with over 4,000 institutions, from giants like Chase and Bank of America to regional banks, credit unions, and community banks, all fiercely guarding their customer bases.

New entrants must be prepared for slower growth and higher customer acquisition costs than they faced in the relatively consolidated markets of Western Europe. US fintech darlings like Venmo, SoFi, Zelle, and Chime have set a high bar with massive marketing budgets and ubiquitous branding.

On the other hand, the sheer size and diversity of the US market mean new entrants can aim for niche segments that are still large in absolute terms. Unlike in smaller European countries, in the United States, a niche play can yield millions of customers. European neobanks can try to differentiate by offering one-stop, digital-first banking solutions to Americans who are hungry for modern user experiences.

This might include slick apps that combine checking, savings, investing tools, real-time spending analytics, budgeting features, and more under one roof, something many US legacy banks have struggled to deliver.

Publicis Sapient’s Donovan said, “Many US fintechs are built on banking-as-a-service models that limit control and innovation. European firms, having built more of their stack in-house, can differentiate on both cost and customisation.”

In other words, a neobank that owns its own tech and platform can potentially out-innovate competitors who rely on white-label banking providers. For example, a European entrant might roll out features Americans aren’t used to seeing from their bank, think instant international transfers with low fees, or multi-currency accounts that update exchange rates in real time.

One obvious opportunity area is remittances and cross-border banking, given the large population of immigrants and expats in the United States. Roughly 20 million US residents are foreign-born Americans from countries in Europe, Africa, and elsewhere. These globally mobile customers often face steep fees and frustration when sending money abroad or managing finances across borders. A case in point is the success of Wise (formerly TransferWise), a London-based platform that has gained a strong US following by offering international money transfers with transparent fees and exchange rates.

“Wise addresses international money movement with a clarity and fee structure that is still uncommon in the US,” Hatami notes.

Bunq, for its part, explicitly says it is targeting digital nomads and expats. The company points out that “nearly five million European expats, entrepreneurs, and professionals” live in the US and often struggle with banking bureaucracy.

Those users are frustrated by traditional banks that aren’t set up for cross-border life. Bunq’s hope is that its experience serving such customers in Europe (with features like travel accounts and easy international transfers) will resonate strongly with this segment in America.

However, cultural differences in consumer expectations also come into play. American customers tend to be far more credit-focused than Europeans. Decades of aggressive credit card marketing have conditioned US consumers to expect rich rewards programmes (cashback, airline miles, points, etc.), sign-up bonuses, and easy credit.

New entrants who only offer debit cards and basic accounts might find it hard to lure customers away from incumbent banks or specialist credit card issuers unless they, too, dangle attractive perks that can be expensive to provide.

Additionally, Americans exhibit a certain stubborn loyalty to traditional banks. Despite the prevalence of fintech options, most consumers are not itching to switch their primary bank. A recent survey by Phoenix Synergistics found that 81% of US consumers considered themselves “loyal” to their main financial institution. Lerner from Javelin agrees, “Americans are largely satisfied with their financial institutions. They are not eager to switch banking relationships.”

According to Javelin’s research, roughly three-quarters of consumers say they are unlikely to move their primary account to a new provider.

This inertia indicates that a foreign neobank requires a compelling proposition or significant incentive to encourage Americans to give it a try. It might require offering significantly better interest rates, zero fees, or unique products to entice customers to overcome the hassle of switching, especially when many Americans have multiple products like direct deposits, bill pays, and maybe a safe deposit box tied to their current bank.

Some industry insiders believe that European neobanks focusing exclusively on direct-to-consumer services face significant challenges in the US due to high customer acquisition costs and established brand loyalties.

“Without a pivot to some differentiated credit product, prepaid and debit offerings often don’t generate enough revenue to warrant those costs,” notes Kevin Fox, chief revenue officer at Thredd, a UK payments processor that expanded to the United States and has helped several neobanks scale internationally.

Fox suggests that fintechs stand a better chance if they expand into business services (B2B) or partner more closely with businesses. For example, some challengers have found success offering expense management cards and software to small companies, or white-labelling their tech to employers and other brands.

These business customers can be more lucrative and cheaper to sign up than millions of individual consumers. Indeed, several European fintech “unicorns” have been extending into SME banking or payments (even Revolut has rolled out business accounts and tools for companies). This B2B focus could provide a beachhead in the United States where pure retail banking might be hard to crack.

Money lies in the stock market

Beyond immediate revenues, a major prize that comes with a US expansion is the possibility of a public listing on a US stock exchange. New York’s capital markets remain the deepest in the world, and IPOs in the US tend to achieve higher valuations and attract a bigger pool of investors than those in Europe.

For Europe’s most valuable fintechs, a US footprint makes it more plausible to court American investors and eventually float on the Nasdaq or NYSE. Both Revolut and Monzo, for instance, are widely expected to go public by the end of the decade, and their leaders have hinted at preferring a US listing over a London one.

Revolut’s CEO, Nik Storonsky, has even publicly complained about the UK’s business climate and suggested the company might list in the US if conditions in London don’t improve.

Such decisions have political undercurrents: European governments are eager to have their “unicorn” fintech champions list at home, while founders and early investors often lean toward the higher liquidity and valuations available in New York.

“Revolut was recently granted a UK banking licence, probably in part because of a promise to list in London, not in the US. Most companies want to list on Nasdaq or the NYSE, raise a ton of money, and cash out. But governments want to keep their unicorns close to home,” Azizov observes.

He adds that if a European fintech truly wants to win in the US market, “they will need to go all in, full teams, full infrastructure, full commitment. They may even need to move their HQ.” In other words, dabbling in the US with a small satellite office won’t cut it if the goal is to become a global player, as it requires a fundamental shift to treat the US as core to the company’s identity.

The holy grail for digital banks is proving that their tech-first, product-led model can generate consistent profits even in the world’s most competitive and entrenched banking market. If a European neobank can crack that code in the US, achieving American-scale profitability while keeping true to its innovative roots, it would validate the entire fintech disruption playbook. But that remains a big “if.” Until then, Europe’s neobanks will continue eyeing American wallets, cautiously optimistic that they can bring something new to the land of red, white, and plenty of green.

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