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
Previous ArticleEBA Updates List of Other Systemically Important Institutions
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.
The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.
Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)
The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)