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ESBG responds to EU Commission Retail Financial Services Green Paper

ESBG responds to EU Commission Retail Financial Services Green Paper

Outlines steps to unleash e-identity tools, sees need for consumers to receive clear, easy-to-understand information



>> See the response to the consultation







​​BRUSSELS, 21 March 2016 – Removal of certain barriers can boost cross-border financial activity, according to a recent response to consultation with EU policymakers by savings and retail banking association ESBG. Responding to a European Commission consultation on its retail financial services green paper, ESBG identified the need for interoperability of e-identification tools, simplification of information obligations, and the provision of a clear framework on data flow and data storage as well as measures to foster digital inclusion are important ingredients to achieve a more sophisticated European single market.

Needed: E-identity tools

One key measure to boost cross-border financial business is the provision of interoperable e-identity tools. Savings and retail banks in different Member States are currently working on making identification tools more easily accessible for consumers. However, the possibilities in the countries differ very much due to national laws and the interpretation thereof. Commission proposals should focus on creating interoperability of different national systems to manage electronic identities. Anti-money laundering (AML) should allow face-to-face identification to be complemented by other procedures that allow for distance identification.

Addressing language in cross-border banking

Another challenge in cross-border business is the provision of complex product information in the 24 official EU languages. European and national laws contain a confusing and more and more complex spider web of consumer-related information duties. On top of this, consumers can only make reasonable buying decisions if they do not only receive easily understandable information, but also read through it. Consumers need to be able to actually process the data they receive, moving away from the traditional economic approach, which assumes that more information leads to better informed consumers. The green paper notes this, pointing out that the provision of appropriate pre-contractual information to customers may be difficult, for instance, when mobile devices with small screens are used. Information overload for consumers remains an issue that needs to be tackled. Consumers need clear, simple and transparent information to make the best possible purchasing decisions.

Digital wave and locally minded banks

European savings and retail banks see digitalisation as a society wide phenomenon which affects all sectors. Digitalisation can help to overcome market obstacles such as far distances, they note, and can help to provide easier access to know-how and perhaps reduce costs. Consumer expectations have been raised thanks to the digital wave. People increasingly expect 24/7 service and easy-to-use technology that keeps them in control of their personal finances.

Locally minded banks, proud of their longstanding and trusted relationships with a sizable client base – including households and SMEs – know this. Digitization changes the customer journey. Working keenly to connect better with their customers, who hunt for facts themselves and transact over an array of channels – regardless of time and place – savings and retail banks are working to deliver comparably high-quality service that's secure. End-to-end processes are being revisited not only to adjust to new delivery channels but also to harness the efficiencies that digitization enables. That means taking a closer look at customer needs and how people connect with their bank.

Balance out the playing field

EU policy can enable banks to further harness the 'New Normal'. The Commission, through its retail green paper, is looking to better assess the regulatory framework for retail financial products with a particular focus on cross-border sale and digitalisation. ESBG sees a clear need for the same rules applied to the same business with the same risks for healthy competition to remain robust and fair. Banks have to comply with much stricter rules than so called fintechs in areas such as customer identification and lending procedures. Policy must be balance to so as not to stifle innovation.

Why its important

The retail banking consultation, which began last December, comes at an important time for savings and retail banks. Banks are increasingly harnessing a multi-channel approach, through traditional bank branches as well as via online and mobile. 

>> See the response to the consultation



Digitalisation; Proportionality; European Institutions; European Supervisory Authorities (EBA-ESMA); Regulation; Supervision