EC launched consultations on digital finance and retail payments in EU. The COVID-19 outbreak has underlined the importance of innovation in digital financial products, as reliance on remote services has increased considerably. The consultation on digital finance seeks views on the possible measures needed to further enable innovative digital financial services in EU, while considering possible competition issues with bigtech companies. The consultation will feed into the new Digital Finance Strategy, which will be presented later this year. The second consultation seeks feedback for the forthcoming Retail Payments Strategy for the EU. Both consultations will remain open until June 26, 2020.
The consultation on digital finance is structured into following three sections:
- The first section seeks views on how to ensure that the financial services regulatory framework is technology neutral and innovation-friendly. While an in-depth assessment is underway for crypto-assets, assessment of whether the EU regulatory framework can accommodate other types of new digital technology driven services and business models is needed. Looking at a potentially more complex financial ecosystem—including a wider range of firms, such as incumbent financial institutions, start-ups, or technology companies like bigtech—EC is also seeking stakeholder views on potential challenges or risks that would need to be addressed.
- The second section invites stakeholder views on ways to remove fragmentation of the Single Market for digital financial services. In addition, the consultation includes a number of forward-looking questions aiming to get stakeholder feedback about other potential issues that may limit the deepening of the Digital Single Market and should be tackled at the EU level.
- Finally, the third section seeks views on how best to promote a well-regulated data-driven financial sector, building on the current horizontal frameworks governing data but also on the recent sectoral developments such as the implementation of the revised Payment Services Directive in EU. EC is also seeking stakeholder views on the potential additional measures that would be needed in the financial sector to reap the full benefits of the data economy while respecting European values and standards.
As set out in the EC work program, given the broad and fundamental nature of the challenges ahead for the financial sector, EC will propose in the third quarter of 2020 a new digital finance strategy/fintech action plan that sets out a number of areas that public policy should focus on in the coming five years. Responses to this consultation will inform forthcoming work on a digital finance strategy or fintech action plan.
Comment Due Date: June 26, 2020
Keywords: Europe, EU, Banking, Insurance, Securities, Digital Finance, Fintech, Fintech Action Plan, Bigtech, Crypto assets, Data, Single Market, Financial Innovation, EC
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