Expert Group of EC Issues Recommendations on Framework for Fintech
The Expert Group on Regulatory Obstacles to Financial Innovation (ROFIEG), set up by EC in June 2018, published a report on the recommendations for creating an accommodative framework for technology-enabled provision of financial services (fintech). The report presents thirty recommendations that cover all segments of the financial sector, all types of novel technologies, a wide range of business cases currently observed, and all types of market players. The recommendations also span important policy areas, including the prevention of money laundering and terrorist financing (AML/CFT), consumer protection, data sharing and use, and governance and operational resilience in the financial sector. EC also published frequently asked questions (FAQ) on the recommendations.
The Expert Group sets out a considerable number of recommended actions, ranging from the monitoring of market developments and emerging opportunities and risks to the clarification of the applicability of (or where appropriate adaptation of) the existing EU regulation and the introduction of new EU law. The recommendations are grouped into four categories:
- The need to adapt regulation to respond to new and changed risks caused by the use of innovative technologies, such as artificial intelligence and distributed ledger technologies (DLT), and to take up any emerging opportunities with respect to regtech or suptech (Recommendations 1-12)
- The need to remove regulatory fragmentation and ensure a level playing field between incumbents and new market entrants, both fintech startups and bigtech firms, across EU (Recommendations 13-24)
- The necessity to reconcile the regulation of personal and non-personal data with the opportunities and risks offered by fintech (Recommendation 25-28)
- The need to consider the potential impact of fintech from the perspective of financial inclusion and the ethical use of data (Recommendations 1 and 29-30)
In some cases, the Expert Group identifies the need for immediate and bold policy action. In particular, the Group identifies several areas where industry is being held back in its capacity to leverage available technology by the absence of clear regulation (in particular, in the area of crypto-assets) and notes that markets may establish practices that are difficult to change subsequently, pointing to the need for ex-ante bold thought leadership and policy action.
Related Links
Keywords: Europe, EU, Banking, Insurance, Securities, Fintech, Regtech, Recommendations, Financial Innovation, Artificial Intelligence, Bigtech, Financial Inclusion, ROFIEG, EC
Previous Article
ESMA Consults on Procedural Rules to Impose Penalties on CRAsRelated Articles
EC Adopts Financial Reporting Changes Arising from Benchmark Reforms
EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.
BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.
HMT Updates List of Post-Brexit Equivalence Decisions in UK
HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.
EBA Issues Erratum for Technical Package on Reporting Framework 3.0
EBA published an erratum for technical package on phase 1 of the reporting framework 3.0.
APRA Publishes FAQ on Measurement of Credit Risk Weighted Assets
APRA updated a frequently asked question (FAQ), for authorized deposit-taking institutions, on the measurement of credit risk weighted assets.
EBA Publishes Risk Dashboard for Third Quarter of 2020
EBA published the quarterly risk dashboard, along with the results of the Risk Assessment Questionnaire survey among 60 banks and 15 market analysts.
ECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro
ECB concluded the public consultation on the introduction of a digital euro in EU.
ECB Finalizes Guide on Supervisory Approach to Bank Consolidation
ECB published a guide that sets out the supervisory approach to consolidation in the banking sector.
SRB Chair Outlines Work Priorities for 2021
The SRB Chair Elke König published an article setting out work priorities for 2021.
FDIC Selects Companies to Compete in Final Phase of Tech Sprint
FDIC has selected 11 technology companies—including BearingPoint, Fed Reporter, Inc, and S&P Global Market Intelligence, LLC—for inclusion in the third and final phase of the rapid prototyping competition.
