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Digitisation

​21st Century banking: digital connection

ESBG calls for a deepening of the Digital Single Market and the FinTech Action Plan and is in favour of a continued industry dialogue in the next mandate period of the EU institutional bodies. Policy responses relating to digitalisation and innovation in financial services should keep pace with the evolution of financial technology. Therefore, a constant dialogue between policymakers and savings and retail banks would be beneficial. 

It is important to use the term FinTech correctly: FinTech products and services can be provided by either financial institutions, such as savings and retail banks, or new entities. Considering FinTech companies as different types of firms can lead to misjudgements when defining a regulatory framework to FinTech activities. Applying the term “FinTech” in the sense of “startups”, can be misperceiving and limiting since banks and other institutions also invest heavily in digitalisation and new technologies. “FinTech” should thus be understood as “technology enabled innovation in all financial services” where banks are considered a central actor and partner for establishment of both a strong FinTech framework and a true Digital Single Market. Therefore, it is of utmost importance to develop a strong framework through the application of an appropriate definition creating a level playing field in a technology neutral ecosystem. 

ESBG advocates for the following high-level principles to create a regulatory and policy framework that promotes successful innovation and digitalisation of the European economy: 

  • A level playing field between stakeholders, and the principle of “same business – same risk, same rules and supervision” should be respected in every policy debate and regulatory framework. Including a holistic and horizontal approach towards the data economy, where access to data and data sharing are seen in a broader context beyond financial services. 

  • Technology neutrality needs to be a core principle as it should be the entity, the service and/or the product that are regulated and not the technology. 

  • Consumer protection, cybersecurity and competition should be at the forefront of EU priorities. 

  • A level playing field across regulation and Member States should also be ensured to prevent barriers to innovation and disparity in technological speed between countries. Consistency is essential in legal application between member states and horizontal communication between supervisors (both geographically and across areas of responsibility). 

  • Finally, digital skills need to be fostered to prevent digital exclusion, heighten data awareness and consumer protection.


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