On March 8, the European Commission issued a press release unveiling a 23-step action plan on how to harness the opportunities presented by technology-enabled innovation in financial services (FinTech). The European Commission identifies two goals: (1) capitalizing on fast-moving progress in technology to improve the European Union’s economy, and (2) incentivizing a more competitive and innovative European financial sector.
The action plan’s steps fall under the three categories listed below; the most notable steps are highlighted under each category:
Enable innovative business models to reach EU scale
- Presenting a proposal for EU passporting in relation to crowdfunding;
- Considering the relevance of the current EU regulatory framework to cryptocurrencies and initial coin offerings, with a Q2 2018 roundtable and report later in 2018 as a further step;
- Establishing foundational steps for a European open banking eco-system; and
- Continuing the use of “regulatory sandboxes” (i.e., experimentation frameworks for innovative firms). As a separate step, the EC will present a blueprint with recommendations for regulatory sandboxes by the Q4 2018.
Support the uptake of technological innovation in the financial sector
- Establishing an expert group to review the EU financial services regulatory framework by Q2 2019 for the use of disruptive technologies, such as distributed ledger technologies (DLT) and artificial intelligence;
- Removing existing obstacles that hinder the greater use of outsourcing to cloud services;
- Considering increased digitization of regulated information on EU-regulated market-listed companies; and
- Hosting an EU FinTech lab where EU and national authorities can engage with technology solution providers in a neutral, non-commercial space during targeted sessions.
Enhance security and integrity of the financial sector
- The European Commission will hold a public-private workshop in the Q2 2018 and consider existing practices, with a view to increasing information sharing on cyber threats among the financial sector by addressing existing barriers; and
- Conducting a cost-benefit analysis of developing a coherent cyber threat testing framework for significant market participants and infrastructures across the EU financial sector.
The action plan is available here.
The press release is available here.
A fact-sheet summary of the action plan is available here.