EBA Responds to EC Consultation on Digital Finance Strategy for Europe
EBA published its response to the EC consultation on a new Digital Finance Strategy for Europe. The response stresses that EBA is committed to securing technology neutrality in regulatory and supervisory approaches and strongly supports the EC initiative toward the new Digital Finance Strategy. EBA supports the proposed initiatives of EC and identifies additional actions to develop a high-level artificial intelligence principle-based framework, support the scaling of regtech and suptech initiatives, and facilitate "machine readability" and the standardization of concepts, definitions, and reporting obligations across EU financial services legislation. EBA looks forward to the publication of the Digital Finance Strategy and stands ready to play its role in optimizing the EU Single Market for digital finance.
EC had published its consultation on a new Digital Finance Strategy for Europe in April 2020. The consultation built on the outcome of work carried out in accordance with the March 2018 Fintech Action Plan, including the actions undertaken by EBA pursuant to its Fintech Roadmap. In its response, EBA has identified a wide range of possible EU-level actions to support the cross-border scaling of innovative technology while ensuring high standards of consumer protection and financial sector resilience. EBA supports proposed enhancements to coordination mechanisms, such as EBA’s Fintech Knowledge Hub and the European Forum for Innovation Facilitators (EFIF), to facilitate a stronger dialog between industry and regulatory and supervisory authorities on innovation-related issues. EBA agrees with the focus of EC on:
- Ensuring that the EU financial services regulatory framework is fit for the digital age
- Enabling consumers and firms to reap the opportunities offered by the EU-wide Single Market for digital financial services
- Promoting a data-driven financial sector for the benefit of EU consumers and firms
- Strengthening digital operational resilience
Toward these goals, EBA supports the actions identified by EC. EBA underscores the need for work on a high-level artificial intelligence principle-based framework as an appropriate foundation for the wider use of artificial intelligence in the financial services. EBA sets out a three-step approach to facilitate a common approach to the use of regtech and support interoperability. EBA also identifies potential measures to facilitate the gathering of best practices and trends on suptech and promote or facilitate the (collective) development of selected specific suptech use cases where there is a role for EBA in acting as a center for excellence and networking to help instigate scalable suptech across the Single Market. Finally, EBA emphasizes the potential of fintech in facilitating structural changes in the financial sector, including by supporting new business models. As new business models emerge (for example, ecosystems for stablecoins), new supervisory models may be needed to ensure effective oversight of applicable regulatory measures such as governance, operational resilience, and consumer protection requirements.
Related Links
Keywords: Europe, EU, Banking, Fintech, Regtech, Suptech, Digital Finance Strategy, Reporting, Machine-Readable Regulations, Basel, EC, EBA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Related Articles
ESAs Issue Multiple Regulatory Updates for Financial Sector Entities
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.
ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments
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.
IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets
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.
EBA Finalizes Methodology for Stress Tests, Issues Other Updates
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
OSFI Sets Out Work Priorities and Reporting Updates for Banks
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
APRA Finalizes Changes to Capital Framework, Issues Other Updates
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
BIS Hub and Central Banks Conduct CBDC and DeFI Pilots
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.
ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations
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.
ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector
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)
EC Adopts Final Rules Under CRR, BRRD, and Crowdfunding Regulation
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)
