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.
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Keywords: Europe, EU, Banking, Fintech, Regtech, Suptech, Digital Finance Strategy, Reporting, Machine-Readable Regulations, Basel, EC, EBA
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