The European Commission has set up a special #fintech #task #force to develop strategies to address the potential challenges that fintech poses. The working group will engage outside experts and market participants in order to #propose #policy suggestions in the first half of #2017.
#Technology has the potential to drive efficiency gains and disintermediation of financial services can bring consumer benefits and competitive advantages for agile #banks and startups.
But despite the apparent advantages, fintech also raises questions on the way that finance operations are implemented, supported, secured and regulated. The new Task Force, called the Financial Technology Task Force (FTTF), will focus on determining the right conditions to support innovation while ensuring financial stability and consumer confidence.
“We see technological innovation in finance as a development that we need to encourage and enable,” said Commission Vice-President Valdis Dombrovskis, responsible for Financial Stability, Financial Services and Capital Markets Union.
&8220;It brings huge opportunities for consumers and for industry, both by established players and new fintech firms. Our Task Force will help us make sure that our policy supports the pursuit of these opportunities, while addressing any risks that may emerge. Efficient financial markets need to make the best possible use of the opportunities that technology presents, while also preserving competition and making sure that new operating systems are safe.&8221;
The European Commission&8217;s Digital Single Market strategy
On May 6, 2015, the European Commission adopted the Digital Single Market (DSM) strategy, which aims to &8220;opens up digital opportunities for people and business and enhance Europe’s position as a world leader in the digital economy.&8221;
&8220;The Digital Single Market strategy aims at laying down an appropriate framework and enabling solutions concerning for instance electronic authentication or cybersecurity,&8221; said Commissioner for Digital Economy and Society Günther H. Oettinger.
&8220;Our ambition is to foster financial innovation while preserving financial stability and protecting consumers and investors. (…😉 Digital innovation is transforming the entire economy and in particular the financial services sector. It disrupts business models and value chains, leads to the emergence of new players and services.&8221;
Identified as the one of the European Commission&8217;s top 10 political priorities, the DSM includes 16 initiatives intended to create new opportunities for startups as well as citizens. The DSM would allow for the free movement of persons, services and capital within the region, enabling individuals and businesses to access and exercise online activities seamlessly.
The DSM is built on three pillars:
Access: better access to digital goods and services across Europe;
Environment: creating the right conditions and a level playing field for digital networks and innovative services to flourish;
Economy and society: maximizing the growth potential of the digital economy.
According to the European Commission, the DSM could create up to €415 billion in additional growth, hundreds of thousands of new jobs and a vibrant knowledge-based society.
FTTF was announced on November 14. The working group is co-chaired by the Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) and the Directorate General for Communications Networks Content and Technology (DG CONNECT). It brings together services responsible for financial regulation and for the Digital Single Market, along with experts in competition and consumer protection policy.
Featured image: Flags in front of the European Commission building in Brussels, via Wikimedia.
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