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Needed: Innovation-friendly, level playing field

Needed: Innovation-friendly, level playing field

​​​Would help, not hinder digital banking breakthroughs




BRUSSELS, 21 March 2019


The following is an excerpt from the recently released brochure 'Together for a growing and more integrated europe: Savings and retail banks’ drive to help Europeans prosper​'.


Digitalisation and FinTech – also called financial technology – are impacting the financial services sector and foster new opportunities to serve the client better. Despite the promise of technology, there are also challenges.

One challenge is finding the right balance within the regulatory and policy framework to fuel innovation. Also topping the list are ways to foster cybersecurity and data protection and to ensure a level-playing field whilst still allowing for competitive markets and high levels of consumer protection.


FinTech: Technology-enabled innovation in financial services

As a vital underpinning of all digitalisation and innovation policy efforts, it is of utmost importance to define FinTech as “technology enabled innovation in financial services”.

This definition is important for levelling the playing field as financial institutions of all sizes who provide a comprehensive range of services, such as ESBG members, have been active innovators for some time. To get even closer to the people they serve, ESBG members value the potential of FinTech, and they make use of many existing FinTech solutions by investing in financial technology or via partnerships with other FinTech firms and start-ups.

A prerequisite for the future of financial innovation and a level playing field is to ensure both consumer protection and financial stability, especially with regards to data protection and cybersecurity threats. To do this, it is necessary to maintain technological neutrality and a level playing field across regulation and regions, foremost the EU Members States. New market entrants making use of financial technology often have a very low and gentle legislative framework, which is problematic. This offers the potential to be detrimental to consumers as the protection afforded to them by applicable law does not apply when dealing with unregulated new entrants. 

Non-European giants are entering and strengthening their positions on the European market, leveraging opportunities brought by the emergence of new technologies. Whilst digital platforms have brought about numerous benefits, their rapid growth also generates numerous concerns and challenges – issues that need to be taken seriously especially since these platforms expand into offering financial services.

A level playing field is especially required when it comes to access to data. In this area, conditions need to be the same for incumbents, smaller players and larger “BigTechs”. Cases occur of BigTech companies denying access to their software/hardware-interfaces towards the banking industry. That behaviour illustrates the necessity of a refurbished and tailored legal framework to create a level playing field and enhance competition in digital financial services like voice banking or mobile payment.

​It has to be highlighted that the second payment services directive (PSD2) has generated an unlevel playing field situation, not favou​​​rable to the European sovereignty, giving access to the banking infrastructure to the BigTech firms (non-European) seeking entrance in the banking market with full force.​





SME finance; Capital Markets Union