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
Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Related Articles
HKMA Enhances Loan Guarantee Scheme to Alleviate Pressure on SMEs
HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.
BoE Sets Out Plan to Transform Data Collection from Financial Sector
BoE has set out a three-phased plan to transform data collection from the UK financial sector over the next decade.
BIS Issues Updates on Technology Initiatives on Cross-Border Payments
BIS recently made a couple of announcements with respect to the planned and ongoing work in the area of financial technology.
ESRB Updates List of Macro-Prudential Measures in February 2021
ESRB updated the list of national macro-prudential measures applied by each member state in the European Economic Area.
BoE Survey Shows Positive COVID Impact on Outsourced Banking Services
BoE has set out results of a survey on the impact of COVID-19 events on the use of machine learning and data science.
ECB Issues Opinion on Proposal to Regulate Crypto-Asset Markets in EU
In response to a request from the European Council and Parliament, ECB published an opinion on the proposed regulation on markets in crypto-assets.
APRA Announces Aggregate Committed Liquidity Facility for Banks
APRA announced the updated aggregate amounts for the 2021 Committed Liquidity Facility (CLF) established between the Reserve Bank of Australia (RBA) and certain locally incorporated authorized deposit-taking institutions that are subject to the Liquidity Coverage Ratio (LCR).
ECB and UK Authorities Agree on Post-Brexit Supervisory Cooperation
ECB published supervisory Memorandums of Understanding (MoUs) with UK as well as other European and non-European authorities.
EIOPA Outlines Strategic Supervisory Priorities for Insurance Sector
EIOPA identified business model sustainability and adequate product design as the two EU-wide strategic supervisory priorities.
US Agencies to Revise FFIEC 031, FFIEC 041, and FFIEC 051 Reports
After considering comments received on the November 2020 proposal, US Agencies (FDIC, FED and OCC) are proceeding with the proposed revisions to the reporting forms and instructions for Call Reports FFIEC 031, FFIEC 041, and FFIEC 051.
