The European Commission (EC) has issued a Green Paper inviting views on how to improve choice, transparency and competition in retail financial services to the benefit of European consumers.  It has decided to launch the consultation because it considers that the retail financial services markets are not yet well integrated in the EU. Therefore the consultation is also seeking views on the facilitation of cross-border financial products.

The paper highlights issues with the current state of the retail financial services markets - these being fragmented markets and insufficient competition and the changing landscape of the sector due to digitalisation.

In the paper, the EC highlights a number of potential solutions to resolve these issues.  In summary the EC is keen to:

  • explore the extent to which consumers can be encouraged to switch whether it be via price-comparison websites, the greater use of financial intermediaries, or lower exit fees
  • increase product profitability
  • encourage product comparability through improved disclosure
  • improve redress mechanisms
  • increase the transparency and comparability of ancillary insurance

In addition, the paper focuses on how the EU can help firms make better use of digitalisation e.g. through electronic signatures.  The EC also revisits the question of access to cross-border financial data to access creditworthiness and considers the lack of knowledge of national personal insolvency regimes to be an obstacle to cross-border activity.

The consultation runs until 18 March 2016.  A Retail Financial Services Action Plan may follow in 2017 depending upon the feedback received.