ESAs published a report on the results of the monitoring exercise on automation in financial advice. The report shows that while the phenomenon of automation in financial advice seems to be slowly growing, the overall number of firms and customers involved is still quite limited. ESAs believe that no immediate action is necessary, as the identified risks have not materialized and the growth of automation in financial advice is limited.
The report presents the results of the monitoring activity and sets out a brief summary of the recent sectoral work carried out by ESAs in the area of automation in financial advice. It also sets out the main results of the monitoring exercise on the evolution of the market in automation in financial advice, along with the related regulatory or supervisory activities in the different member states or sectors.
The report shows that the previously identified (by ESAs) risks and benefits of this phenomenon have largely been confirmed by national competent authorities and remain valid. In examining the emerging business models, ESAs found that automated services are being offered, through partnerships, by established financial intermediaries, rather than by pure fintech firms. Additionally, the emerging trends include the use of Big Data, chat bots, and a broader range of products. ESAs concluded that, given the overall importance of automation in financial advice and the emergence of ongoing changes to business models, a new monitoring exercise will be conducted if and when the development of the market and market risks warrant this work.
Keywords: Europe, EU, Banking, Insurance, Securities, Fintech, Financial Advice Automation, ESAs
Previous ArticleESMA Publishes Opinion on Proposed Amendments to Standards on SFTR
HKMA announced the publication of a report on fintech adoption and innovation in the banking industry in Hong Kong.
BIS published a working paper that examines the drivers of cyber risk, especially in context of the cloud services.
ECB launched consultation on a guide specifying how the Banking Supervision expects banks to consider climate-related and environmental risks in their governance and risk management frameworks and when formulating and implementing their business strategy.
ECB published an opinion (CON/2020/16) on amendments to the prudential framework in EU in response to the COVID-19 pandemic.
EBA published a report that examines the interlinkages between recovery and resolution planning under the Bank Recovery and Resolution Directive (BRRD).
SRB published the final Minimum Requirements for Own Funds and Eligible Liabilities (MREL) policy under the Banking Package.
EIOPA published its risk dashboard based on Solvency II data from the fourth quarter of 2019.
MNB published a statement on loan payments post the announced moratorium, in addition to a set of new questions and answers (Q&A) on supervisory measures and requirements announced amid COVID-19 pandemic.
EBA updated the Single Rulebook question and answer (Q&A) tool for banks.
US Agencies (FDIC, FED, and OCC) published an interim final rule that temporarily revises the supplementary leverage ratio calculation for depository institutions.