Digitisation: taking the digital path, keeping a human touch
>> Position on Digitisation and Innovation
BRUSSELS, 29 March 2016 – Keeping pace with the accelerating speed of digitization is a challenge for all banks and regulators, but it offers an unparalleled opportunity to increase the customer proximity that has always been a characteristic of savings and retail banks. Digitization changes how customers and banks communicate with each other. Physical branches will become less essential to processing customer transactions. But their importance will increase as they become the centre of an intensified high-quality customer advisory service.
Savings and retail banks are strongly committed to treating all digital data as strictly confidential, and stress the responsibility of policy makers, regulators and supervisors to create and apply a regulatory framework that fosters innovation but simultaneously ensures the security, data and consumer protections that is key to preserving trust in the financial sector.
ESBG also notes a worrying tendency to adopt light-touch regulation for new digital competitors in financial services, whilst leaving incumbent savings and retail banks burdened by heavy regulation.
Clear legal rules on the location of data within Europe are needed to foster consumer trust in using the cloud. Consumers should be informed about where and by whom information about them is stored and about the duration of the storage. Contracts with cloud providers need to clearly indicate the conditions of the storage taking into account possible future scenarios, namely termination, resumption of services and data portability.
ESBG sees online platforms regulation, more specifically a legal framework the commission is looking to create, as potential blow to high-tech innovation. Self-regulation and enforcement of existing rules – namely national and EU competition law, fair trade practices, and redress mechanisms – should be sufficient to properly keep online platforms in check. ESBG welcomes policymakers' efforts to bring to life and nourish European digital infrastructures, such as search engines, social media and automated translation technology.
In many EU Member States, the national savings and retail banks are currently working on making authentication tools more easily accessible for consumers. But possibilities to deploy these tools differ greatly in EU countries due to national laws and their interpretation. To address this issue, an EU-wide interoperability framework is needed to unleash cross-border acceptance of bank-guaranteed e-identities / e-signatures.
The European digital single market is hampered by the struggle to harmonise EU rules. Some roadblocks prevent a smoothly flowing cross-border digital market and threaten a level playing field. They include inconsistent implementation of European law, including stricter laws than necessary and different tacks taken by national regulators when enforcing rules. ESBG observed such inconsistencies and incoherencies, or the risk thereof, in multiple instances. Most notable are the varied approaches taken by national authorities on usage of the cloud, e-authentication tools, the fragmented approach in Member States to fighting cybercrime, and varying willingness by them to fulfil shift to e-government.