20 April 2017

The European Commission has sought to progress its “digital single market for Europe” strategy by launching a public consultation on Fintech entitled Fintech: a more competitive and innovative European financial sector. It looks for input from the industry stakeholders to further develop the Commission's policy approach towards technological innovation within financial services. This feedback, coupled with analysis conducted by its internal Financial Technology Task Force, will help inform and develop the Commission’s policy and regulatory framework for Fintech to reflect the three core principles to be adopted by the Commission:

  • technological neutrality
  • proportionality
  • market integrity.

Having presented the public consultation during a Fintech conference #FINTECHEU "Is EU regulation fit for new financial technologies?" on 23 March 2017, the Commission is seeking responses from the perspective of financial institutions providers and also consumers. The consumer perspective is particularly important to the Commission as it is interested in how Fintech can benefit consumers and boost the market for retail financial services.

The Consultation is split into four sections:

1. Fostering access to financial services for consumers and businesses

Recognising Fintech as a vehicle to increase financial inclusion through better access to financial services and alternative funding sources for SMEs, the Commissions seeks input in respect of four sub-categories:

  • automated financial advice through artificial intelligence and big data
  • crowdfunding through social media
  • the impact of sensor data analytics on insurance businesses
  • other technologies.

2. Bringing down operational costs and increasing efficiency for the financial industry

The Commission hopes to better understand the benefits of increased efficiency (through use of RegTech, data and cloud computing, distributed ledger technology and outsourcing) within financial services when considered against the operational challenges.

3. Making the single market more competitive by lowering barriers to entry

The Commission considers possible options such as: the adoption of an EU-wide licence for tech companies to operate across Europe or the creation of a regulatory framework and sandbox environment covering the entire EU.

4. Balancing greater data sharing and transparency with data security and protection needs

At the forefront of the Commission’s policy agenda for Fintech are the issues surrounding data sharing and security as new technologies lower information barriers. The Commission seeks to balance these issues without losing consumer trust or resorting to unwarranted restrictive interpretation of personal data protection rules thereby stifling innovation and competition.

Reponses are being sought by 15 June 2017 and can be submitted via an online questionnaire.

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