The Expert Group on Regulatory Obstacles to Financial Innovation, a group of financial sector experts set up by the European Commission in June 2018, has today published its report entitled Thirty Recommendations on Regulation, Innovation and Finance. The Group, which has been tasked with reviewing the application and suitability of the European legal and regulatory framework to FinTech, recommends action in four broad areas:
–the need to respond to new and changed risks caused by the use of innovative technologies such as Artificial Intelligence (AI) and Distributed Ledger Technology;
– the need to remove fragmentation across the EU and ensure a level playing field between different participants in the financial services sector as they leverage new technologies;
– the necessity to reconcile data protection with the opportunities offered by FinTech;
– the need to consider the potential impact of FinTech on consumers, from the perspective of financial inclusion and the ethical use of data.
Dr Philipp Paech, Associate Professor of Financial Law at the London School of Economics and Chairman of the Expert Group said:
“Much of what is called ‘FinTech’ is already covered by EU law, albeit not very consistently. Apart from necessary clarifications and harmonisation of the existing rules, there are only few entirely new risks to consider. The most significant challenge is the entry of BigTechs such as Google and Amazon into the financial market, and, closely connected to the former, the implementation of the data economy in financial services. The EU needs common answers to these questions, to foster an environment to support the scaling up of FinTech across the EU and home-grown global champions and to remain amongst the global standard setters in finance, in particular with respect to consumer protection.”
Read the Expert Group's full press release and recommendations.