Valdis Dombrovskis of EC, Yves Mersch of ECB, and Steven Maijoor of ESMA spoke at the Second Annual Conference on “Fintech and Digital Innovation: Regulation at the European level and beyond” in Brussels. They discussed the implications of innovations in financial technology and the work that is being done, and can be done, to meet the resulting challenges.
Valdis Dombrovskis, the EC Vice President, mentioned that EC plans to present its Fintech Action Plan next week. The Action Plan will set out a number of concrete steps for a more innovative and competitive EU financial sector. He highlighted that well-informed and skilled supervision of Fintech activities is a core theme of the Action Plan. This year, EC will establish an EU FinTech Lab, for supervisors to engage with technology solution providers. The aim is to raise the level of knowledge and understanding about new technologies. He added that EC supports efforts by ECB and supervisors to develop an EU-wide testing framework. Additionally, this year, EC plans to organize a public-private workshop to find and break down barriers that limit information-sharing among market participants on cyber threats. He also discussed in detail the three main goals of the Fintech Action Plan:
To support innovative business models to scale up across the single market
To encourage the uptake of new technologies in the financial sector.
To increase cybersecurity and the integrity of the financial system
Yves Mersch, Member of the ECB Executive Board, emphasized that innovation and digitalization in payment services will significantly change the payments market. The legislative framework established by PSD2 supports such innovation and enhances competition. It offers a legislative basis for a level playing field between new entrant third-party providers (fintechs) and incumbent banks. Regulatory requirements for third-party providers and banks differ, along with the spectrum of services that they provide and the level of risk that they need to protect against. He said he would welcome it if both fintech third-party providers and banks were to make use of the opportunities granted by law and to compete for the most innovative and efficient provision of payment initiation services and account information services. They should build their services on common technical standards with a pan-European reach to benefit their customers and the European citizens while formulating appropriate cyber strategies to take care of the cyber risks that accompany digitalization.
Steven Maijoor, the ESMA Chair, during his keynote speech, addressed the key areas of fintech, with focus on examining the structural features of fintech, monitoring fintech by looking at economic function, and outlining the challenges and opportunities for regulators. He concluded that "we need to act in a balanced way, taking account of risks and benefits. Fintech is a fascinating topic, and it is reshaping the financial sector profoundly. We will use our measured approach to tackle the challenges fintech brings, and to grasp the opportunities."
Keywords: Europe, EU, Banking, PMI, Fintech, PSD_2, Action Plan, ESMA, ECB, EC
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