The European Commission has set up a Fintech Task Force in response to the effects of digital innovations in the banking sector.
The Task Force is co-chaired by DG FISMA and DG CONNECT and brings together services responsible for financial regulation and the digital single market, along with experts in competition and consumer protection policy.
The Fintech Revolution
Fintech is used to describe technology-enabled finance including payments, lending, raising capital and investment management, foreign exchange and money transfer, and robot advisers. It also includes regtech, its application to regulatory compliance.
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According to a publication by the Commission, the fintech revolution has resulted from a confluence of technological developments that have come to the market ranging from the continuing increase in processing and storage capacity, cloud computing, social network and platform technologies, artificial intelligence, mobile technologies and distributed ledger technology or blockchain which is high on the agenda of the whole sector.
The Commission observed that “the current transformation affects existing financial institutions, as well as the new players, such as fintech startups or large internet platforms. The challenge is both to lay down the right conditions to support innovation and for a future-proof environment to emerge.”
EC Vice President Valdis Dombrovskis commented: “It is clear that parts of our banking sector do not have the scale, or in some cases the expertise, to make the most of technological change. Digital payments and other innovations are developing rapidly. European banks will have to seize on digital innovations and work them into their business models.”
The Commission will engage with market participants regarding the formulation of policy recommendations and measures during the course 2017 to address these issues.