Call to EBA for equal treatment of actors when accessing consumer payment accounts

The European Savings and Retail Banking Group (ESBG) welcomes the opportunity to respond to the public consultation from the European Banking Authority (EBA) on the amendment of its Regulatory Technical Standards (RTS) on Strong Customer Authentication and Secure Communication (SCA&CSC) under the Payment Services Directive (PSD2) with regard to 90-day exemption from SCA for account access.

ESBG and its members strongly disagree with the EBA’s claim that banks fail to provide user-friendly Strong Consumer Authentication (SCA) methods and that its application often causes friction in the customer journey. Instead, ESBG calls for equal treatment of actors when accessing consumer payment accounts.

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Covid 19 WSBI Statement

United efforts indispensable to overcome crisis

We welcome both the decision to update the Supervisory Review and Evaluation Process (SREP) Guidelines and the overarching objectives to increase convergence of practices across the EU and to align with other relevant EBA Guidelines.

The financial industry faces an unprecedented challenge that may last for quite some time due to the coronavirus pandemic, states a letter for policymakers worldwide from savings and retail banking association WSBI. Signed by its President Isidro Fainé and Managing Director Chris De Noose, the letter says focus starts with saving as many lives as possible, eradicating the coronavirus pandemic and ensuring that the so-called “real economy” suffers as little as possible from vast Covid-19-caused economic damage.

Support measures done so far by governments can help SMEs, WSBI writes, expecially the the self-employed and individuals, as well as larger, heavily affected industries such as the services sector at large, in particular manufacturing, transport and tourism.

“Economic, financial, fiscal and social measures need to be designed and implemented straightaway, the letter states, adding “international cooperation is of utmost importance. The world needs to face the coronavirus crisis with decisive actions in a united and well-coordinated manner.”

Committed to people, communities, SMEs and beyond

Savings and retail banks fully commit to supporting their customers, the letter states, be it individual people, families, SMEs, institutions, young people, the elderly and society in general who live in urban as well as in rural areas. “We aim to figure out the best, sustainable solutions. Locally rooted savings and retail banks have a crucial stabilising function in times of crisis with their infrastructure, closer relationship with customers and continuous lending.” WSBI member banks help SMEs and other companies overcome liquidity bottlenecks and provide stability. “For this to succeed,” WSBI added, “everything possible should be done in regulatory and macroprudential terms to maintain the liquidity and credit supply.”

On firmer footing since crisis

Playing an essential part of the solution, savings and retail banks see major financial reforms during the past decade have made their banks safer, more stable and more resilient in the face of shocks. Facing the coronavirus on stronger footing, their inclusive and socially committed approach to banking remains vital and steadfast during challenging times like these, they note.

WSBI added: “Clients of savings and retail banks can continue to rely on their banks as partners that do their utmost to mitigate the effects of this critical situation. Now, more than ever, we will stand strong to provide confidence, comfort and trust when customers and communities need it most.”

Policy ideas to give banks enough flexibility

WSBI members welcome the measures already taken by authorities, and proposes ideas to give banks “enough flexibility to continue supporting their customers. Some steps already taken need additional guidance and extended scope to achieve their objectives.” They include:

  • temporarily relax the rules when it comes to capital and liquidity buffers
  • increase monitoring, develop contingency plans and provide additional support for the most hard-hit sectors – tourism, transportation and the hospitality industry – by easing the tax burden for certain much-affected firms in vulnerable regions.
  • a plan to recover economic activity and production of goods and services and to stimulate consumption to prevent the economy from recession.
  • public authorities should free up additional capital and provide loan guarantees
  • flexibility on the asset quality assessment of loans by supervisors when public moratoria on payments have been implemented. This would also strengthen banks in temporarily supporting solvent clients facing liquidity difficulties.

IFRS 9 accounting standard implementation for the recognition of loan loss provisions should take into account the disruptive Covid-19 crisis. It is crucial that banks are granted enough manoeuvring room to modify the payment schedule of the affected borrowers without affecting their accounting provisions nor their solvency; that is, avoiding the increase in non-performing assets that would derive from the current regulations.

​Global coordination, relief measures much needed

At national and regional level, much can be done through coordination among policymakers, keeping neighbors in mind. At a global level, need exists for G20 to prioritise global financial stability, a sustainable and swift recovery and a balanced development as common goals. The recent G7 leaders’ commitment to do ‘whatever is necessary’ to support the global economy, a very well received first step, but future decisions regarding interpretation, adjustments, and tailoring of regulations must be properly coordinated at global level via the Financial Stability Board, the Basel Committee, the International Organization of Securities Commissions and the International Association of Insurance Supervisors. The IMF has also underlined the need for global coordination in its recent paper on policy.

What happens next

WSBI suggests in its statement that regulatory authorities ask themselves if new regulatory requirements that are planned to be implemented in 2020-2022 are critical, or, if there is a possibility, that they can be delayed by 1-2 years, depending on how the crisis further develops. Even if only a part of the upcoming regulation could be delayed this would certainly help banks, and other players, to focus their resources on critical immediate action.

Once the emergency has been overcome and the situation is stable, it may be useful to carry out an impact assessment in order to see what measures should be taken to ensure that the global economy is still growing.

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WSBI statement on Covid-19: united efforts to overcome the crisis are indispensable

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Digital platforms serving the agricultural sector

Scale2Save Campaign

Micro savings, maximum impact.

BRUSSELS, 18 November 2021 - The World Savings and Retail Banking Institute (WSBI) programme for financial inclusion, Scale2Save, launched today ‘A case study on digital platforms serving the agricultural sector’, the fifth of its State of the Savings and Retail Banking Sector in Africa research series.

This new publication, co-authored with FinMark Trust, an independent non-profit trust for making financial markets work for the poor, explores the topic from the point of view of Financial Service Providers (FSPs). It aims to answer two key questions FSPs must consider when weighing whether to launch an online platform for farmers: Why should I participate – and if I do, what must I keep in mind? This case study looks at a variety of African agricultural platform providers and more closely at three platform models: bank-led (First City Monument Bank in Nigeria), fintech-led (DigiFarm in Kenya) and telco-led (EcoFarmer in Zimbabwe).

The emergence of digital platforms serving farmers in Africa is of enormous importance as the agricultural sector employs more than half of the continent’s labour force, and accounts for almost 20% of the continent’s gross domestic product.

Platform models are still very new in the agricultural arena. However, the use of platform services to support smallholder farmers has blossomed. During the pandemic they proved a valuable lifeline, enabling farmers to stay in touch with their value chain partners, from financial service providers to farm input suppliers and off-takers.

Looking forward, agricultural digital platforms clearly have the potential to play a powerful role as a catalyst for financial inclusion and to transform the food sector into a more inclusive one that offers viable opportunities for smallholder farmers.

This case study is guided by the overarching objective of the WSBI research series, which is to inform FSPs about developments in the finance industry that affect services to low-income customers.

WSBI’s Scale2Save programme is a six-year partnership with the Mastercard Foundation.

The publication is available for download free of charge here.

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Case study cover

The publication is available for download here.

FULL CASE STUDY - ENFULL CASE STUDY - FRALL CASE STUDIES

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Isidro Fainé re-elected as WSBI president

Isidro Fainé, president of “la Caixa" Banking Foundation, was re-elected for another three years as president of World Savings and Retail Banking Institute (WSBI) at the organisation's 2021 General Assembly, held in Paris. The Institute's Managing Director will be Peter Simon of Germany.

WSBI members devote 1.8 billion dollars annually to the fight against poverty and social inequality.

The priorities for the coming years are: financial inclusion, promoting sustainable finance, innovation and embracing digitisation to forge ever-closer relations with customers, and strengthening solvency within the framework of Basel IV.

Besides Isidro Fainé and Peter Simon, the WSBI President’s Committee is formed by Dominique Goursolle-Nouhaud, president of the Fédération Nationale des Caisses d’Epargne (France); Rebeca Romero Rainey, president & CEO of the Independent Community Bankers of America (USA); Macario Armando Rosales Rosa, president of Fedecrédito (El Salvador); Helmut Schleweis, president of the German Savings Banks Association (Germany); Isara Wongrung, executive vice-president of the Government Savings Bank (Thailand); and Redouane Najmeddine, chairman of the Management Board of the Banque Al Barid (Morocco).

The members of the Assembly of this Institute, which represents the interests of 6,500 savings banks and retail banks in more than 60 countries, unanimously re-elected Isidro Fainé as WSBI president for the next three years. Peter Simon of Germany will be managing director over the same period.

The priority lines of action established for the coming years include financial inclusion, promoting sustainable finance (reflecting the fact that WSBI member institutions are characterised by their social commitment to the communities in which they operate), exchanges of good practice in the implementation of the new Basel IV solvency framework, and innovation, seeking to make digitalisation a tool to bring members closer to customers.

In his speech, Isidro Fainé noted that, “over the coming years, we will have to address major challenges: economic recovery, increasing inequality, demographic changes that will put pressure on natural resources, climate change, sustainability… The urge to help the most vulnerable and strengthen the community forms part of our members’ DNA: members’ social contributions stand at some 1.8 billion dollars per year, aimed at fighting poverty and social exclusion”.

During Isidro Fainé’s first mandate as president (2018-2021), the organisation focused on the following issues:

1) Promoting financial inclusion:

The WSBI has exceeded the targets set by the World Bank in its commitment to Universal Financial Access (UFA2020), increasing the number of banked people by 329 million between 2014 and 2020. Moreover, the organisation’s cooperation with the Mastercard Foundation was strengthened, leading to the launch of such initiatives as Scale2Save, focused on promoting savings in Africa. Collaboration also began with the Profuturo digital literacy project to promote financial education in developing countries.

2) Increasing dialogue with international organisations:

In response to the crisis caused by the pandemic, the WSBI has focused on promoting economic, fiscal and social measures before regulators, aimed at establishing a flexible framework that enables both a successful recovery from the crisis and that the new demands that arise as a result can be satisfied.

3) Encouraging cooperation among members:

The World Savings and Retail Banking Institute is formed by four regional groups (Europe, Asia-Pacific, Africa, and North America/Latin America/Caribbean). The coronavirus crisis has resulted in increased exchanges of good practice in responding to the financial needs of all types of groups, institutions, large enterprises, SMEs and families.

The World Congress also renewed the mandates of the other statutory bodies, including the Coordination Committee. Antonio Romero, Corporate Director of Association Services and Resources at CECA, was elected as chair of this committee, which coordinates the associated activities of the WSBI and the European Savings and Retail Banking Group (ESBG). Similarly, Joan Rosàs, Director of International Institutional Relations at CaixaBank, was appointed as the representative of the WSBI Board for International Relations. This representation strengthens the participation of the Spanish banking sector in European and international working groups.

Founded in 1924, the WSBI represents the interests of 6,500 savings and retail banks around the world. WSBI members have total assets of 15 trillion dollars, employing 2.2 million workers and serving some 1,400 million customers in 63 countries, with a network of 221.577 offices providing banking services all types of groups, institutions, large enterprises, SMEs and families.

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On the EBA guidelines for Anti-Money Laundering Compliance Officers

We welcome both the decision to update the Supervisory Review and Evaluation Process (SREP) Guidelines and the overarching objectives to increase convergence of practices across the EU and to align with other relevant EBA Guidelines.

ESBG calls for several clarifications and amendments.

Particularly, in light of the different transposition of the AML Directive, it is of utmost importance that, where a conflict is unavoidable, national specificities prevail guideline provisions.

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On the EU Commission evaluation of the Mortgage Credit Directive

After the ESBG meeting with the European Commission on 30 September, we have recently shared some documents as a follow-up.

ESBG members finalised a position paper on the MCD review, and shared two briefing documents on the topics of reverse mortgages and green/energy efficient mortgages. These are topics on which the Commission is keen to receive more information from the national level to consider possible actions at the EU level.

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ESBG welcomes EBA's greater emphasis on proportionality

ESBG welcomes that the EBA is placing greater emphasis on proportionality in regulation, and hopes that this will pave the way for more proportionality in future regulations. However, more can be done to improve the proposed classifications, increasing granularity and have a paper which better explains how the ideas could be implemented.

We welcome the EBA’s commitment to using, primarily and as far as possible, already existing data from its database of supervisory reporting. However, if more data is required from financial institutions, we urge the EBA to deliver on the promise that these collections are proportionate to the complexity of the underlying requirements itself and to the burden of institutions and supervisors to deliver such data.

We consider the step-by-step approach to be suitable in principle. However, the procedure in step 2 is not clear. In our view, the proposals for the metrics are not yet fully developed. It is not sufficiently clear how on this basis – without concrete benchmarks – the decisions of a political expert can be better supported.

ESBG very much appreciates the inclusion of a classification for co-operative and savings banks. These banks are by nature local, rather small banks with a low-risk profile and a focus on core banking business. We urge the EBA should ensure that the proportionality considerations are also applied to small and non-complex institutions that are part of a consolidated group, particularly credit institutions that are only locally/regionally active and therefore do not have a systemic impact.

We would like to point out that Classification III has clear disadvantages compared to Classifications I and II. Institutions that are to be subject to the strictest regulation are to be delimited by means of a size criterion (€ 30 billion balance sheet total; point 31 lit. d of the EBA discussion paper). A delimitation on the basis of the balance sheet total would contradict the basic idea of a sufficiently differentiated regulation on the basis of the pro-portionality principle.

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Digitalisation of financial service providers to serve low-income customers

Scale2Save Campaign

Micro savings, maximum impact.

New Scale2Save case study: BRUSSELS, 30 September 2021 - The World Savings and Retail Banking Institute (WSBI)’s programme for financial inclusion, Scale2Save, launched today ‘A case study on connecting with low-income customers through digitalisation’, part of its State of the Savings and Retail Banking Sector in Africa research series.

Digitalisation is revolutionising the way financial service providers conduct their business. In Africa, the spread of mobile phones over the past two decades allowed the development of new forms of mobile transactions. Now digitalisation of African financial service providers is entering a new phase, as the widening use of mobile phones to access the Internet enables the roll-out of profitable digital services for low-income customers.

This new publication, co-authored with FinMark Trust, explores the answers to a question that many executives are asking: How best to digitalise a financial institution? The case study draws upon management consulting literature to assess digitalisation strategies in a pragmatic way. It also assesses three leading African financial organisations against this framework: Al Barid Bank, Morocco; Equity Bank, Kenya; and Consolidated Bank, Ghana.

The aim of this publication, as of the Scale2Save programme, is to identify the elements for financial service providers to serve low-income people and therefore boost financial inclusion. By opening the doors of remote access to formal savings and payments to people long excluded from them, these new customers get opportunities to improve their economic situation. They are enabled to smooth consumption, build assets, prepare against risks and improve their ability to cope and recover from shocks. In the context of Covid and its consequences, this case study highlights the importance of speeding up digitalisation by financial services providers not only in their service offer but also as dynamic organisations and as part of a digital financial ecosystem. It also underscores customer centred initiatives as a key to success.

WSBI’s Scale2Save is a six-year partnership with the Mastercard Foundation.

Downloads

The publication is available for download here.

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ECB announces members of Digital Euro Market Advisory Group

ECB appoints 30 senior business professionals with proven experience. Members to advise Eurosystem on design and distribution of potential digital euro. Meetings of group to be held at least quarterly, starting in November 2021.

25 October 2021 – The European Central Bank (ECB) has today announced the members of the Market Advisory Group for the digital euro project.

The Eurosystem’s High-Level Task Force on Central Bank Digital Currency called for expressions of interest on 14 July, following the Governing Council’s approval of the digital euro project investigation phase. After assessing applications, the selection committee appointed 30 senior business professionals with proven experience and a broad understanding of the euro area retail payments market.

“I am pleased that many high-quality experts from the private sector are willing to contribute to the digital euro project”, says ECB Board Member Fabio Panetta, Chair of the High-Level Task Force.

“Their expertise will facilitate the integration of prospective users’ and distributors’ views on a digital euro during the investigation phase.”

Members of the Market Advisory Group will act in a personal capacity, advising the Eurosystem on the design and distribution of a potential digital euro from an industry perspective, and on how a digital euro could add value for all players in the euro area’s diverse payments ecosystem. A representative from the European Commission and representatives from Eurosystem national central banks will also participate in the group.

Meetings are to be held at least quarterly, starting in November 2021, and written consultations will be organised between meetings. The issues identified will also be considered in the Eurosystem’s established forum for institutional dialogue on retail payments, the Euro Retail Payments Board (ERPB). The ERPB consists of high-level representatives of industry associations and represents a wide range of stakeholders. In addition, the Eurosystem will engage with the public and merchants through dedicated surveys (e.g. of focus groups) and will continue to hold technical workshops with the industry.

Members of the Digital Euro Market Advisory Group:

Aleksander Kurtevski, Managing Director, Bankart
Alessandro De Cristofaro, Director Digital Innovation Strategy, CRIF
Antonio Macías Vecino, Head of Payments Discipline, BBVA
Axel Schaefer, Payment Regulation and Innovation Specialist, Ingka Group (IKEA)
Cristian Cengher, Product Owner Cross Border Payments, Erste Group Bank AG
Cyril Vignet, Project Manager Innovation, Banque Populaire Caisse d’Epargne
Diederik Bruggink, Head of Payments and Innovation, European Savings and Retail Banking Group
Etienne Goosse, Director General, European Payments Council
Fanny Solano, Director Digital and Retail Regulation, Transparency and Implementation, CaixaBank
Fernando Rodríguez Ferrer, Head of Business Development, Bizum
Gerard Hartsink, Chairman, ICC DSI Industry Advisory Board
Inga Mullins, CEO, Fluency
Jens Holeczek, Head of Digital Payment Unit, National Association of German Cooperative Banks
Jochen Siegert, Managing Director, Global Head of Asset Platforms, Deutsche Bank AG
Nicolas Kozakiewicz, Chief Innovation Officer, Worldline
Nilixa Devlukia, CEO, Payments Solved
Nils Beier, Managing Director, Accenture Strategy & Consulting
Paul Le Manh, Advisor to CEO, EPI Interim Company
Piet Mallekoote, Former CEO, Dutch Payments Association
Régis Folbaum, Head of Payments, La Banque Postale
Roberto Catanzaro, Chief Strategy and Transformation Officer, Nexi Group
Ruth McCarthy, Managing Director, FEXCO Corporate Payments
Sean Mullaney, Head of Payment Engineering, EMEA Payments, Stripe
Silvia Attanasio, Head of Innovation, Associazione Bancaria Italiana
Sofia Lindh Possne, Senior Advisor, Group Regulatory Affairs, Swedbank
Stefano Favale, Head of Global Transaction Banking, Intesa Sanpaolo
Teresa Mesquita, Chief Marketing and Product Officer, SIBS Forward Payment Solutions
Valdis Bergs, Chairman of the Board, Mobilly sia
Ville Sointu, Head of Emerging Technologies, Nordea
Yves Blavet, Open Banking Director, Société Générale

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The EU Commission’s proposed ‘single-stack’ approach for Basel III finalisation would harm European banks

ESBG also calls for a proportionate implementation of the Basel III framework in the EU banking system to ensure that Europe’s diversified banking sector continues to foster economic growth.

BRUSSELS, 27 October 2021 – The European Savings and Retail Banking Group (ESBG) calls on the European Parliament and the Council of the EU to reconsider the output floor implementation on a ‘single-stack’ approach included in the European Commission’s proposal for the finalisation of the Basel III standards in the EU, announced today.

The ‘single-stack’ approach would mean applying the output floor to EU-specific capital requirements, on top of internationally agreed ones. ESBG calls for the use of the ‘backstop approach’, meaning applying the floor only to internationally agreed capital requirements. The ‘backstop approach’ would help preserve and strengthen the EU’s diverse banking system. Otherwise, the ability of Europe’s diversified banking sector to provide finance to the real economy and foster economic growth could be hampered.

“ESBG and its members believe that the Co-legislators should implement the Basel III framework adapting it to the specificities of the European banking market, where needed. This includes an application of the output floor that does not exceed what is explicitly laid down in the agreement on the finalisation of Basel III”, said Johanna Orth, Chair of ESBG’s Task Force on Basel.

The package of reforms to finalise the Basel III framework is designed for internationally active banks. Therefore, when implemented within the EU regulatory framework the EU special features should be considered, including those which are already enshrined in the banking regulation. In particular, the so-called SME supporting factor should be retained, as it provides the right incentive to stimulate real economic growth.

“The implementation of the Basel standards within the EU regulatory framework should reflect the proportionality principle, taking into consideration the risk nature, scale and complexity of the activities of European credit institutions”, said ESBG Managing Director, Peter Simon.

This would allow financial institutions to carry out their activities under a non-detrimental regulatory framework which strengthens the European banking sector – the backbone of the EU’s ‘real economy’. A disproportionate regulatory weight also would negatively impact banks, which would be overburdened with regulatory requirements that could even push resources away from customer service.

The EU banking sector’s diversity ensures that a full range of services is offered to customers at competitive prices, in particular by banks that focus on SMEs, households and local communities.

In this context, ESBG is looking forward to bringing the voice of its members to the upcoming legislative process. We believe that close cooperation among all stakeholders will be indispensable for the successful implementation of the finalised Basel III standards. We encourage the EU decision-makers to make full use of the discretions envisaged in the Basel III text, including those on operational risk, which will be crucial for continuous and solid credit provisions to the real economy after the implementation phase.

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