European Commission to propose recommendations for fintech firms next year

November 16, 2016 - 

The European Commission said it will likely propose recommendations for financial technology firms early next year, which marks the first step towards assessing the risks and rewards presented by the emerging sector, according to a report by the Financial Post.

“It brings huge opportunities for consumers and for industry,” said EU financial services commissioner Valdis Dombrovskis. “Our task force will help us make sure that our policy supports the pursuit of these opportunities, while addressing any risks that may emerge.”

Dombrovskis did not state whether the European Commission is working towards a complete set of regulations, but it is likely that it will implement some regulatory changes.

“If you think payment services by banks need to be strictly regulated, then you also need similar measures for those who provide payment services without a banking license,” Elke Koenig, the head of European banking watchdog, Single Resolution Board.

Koenig said that while not all fintech needs to be regulated, the sector ought to implement some rules.

These remarks were echoed by Wim Mijs, head of the European Banking Federation (EBF), calling for the need to “move from entity-based rules to activity-based rules.”

He said that fintech companies can build alliances with banks by helping lenders innovate while financially benefiting from their customers and regulatory expertise.

In a report on fintech, EBF discussed some potential competitive risks that could occur from digital platforms such as Google, Facebook or Apple, which may leverage their customers’ personal data to provide other financial services.

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About Justin Lee

Justin Lee has been a contributor with Biometric Update since 2014. Previously, he was a staff writer for web hosting magazine and website, theWHIR. For more than a decade, Justin has written for various publications on issues relating to technology, arts and culture, and entertainment. Follow him on Twitter @BiometricJustin.