A legal framework on the use of new technologies in the financial sector could aim to support innovation and respond to concerns born of the emergence of new technologies in this sector ('FinTech'), the major financial policymakers of the European Union said after an informal meeting in Tallinn on Friday 15 September.
The ministers acknowledge that technological innovation in the field of finance represents a genuine opportunity with enormous potential for the European financial system. The Governor of the Estonian Central Bank, Ardo Hansson, said that new technologies could offer an alternative to traditional bank models, promoting the arrival of new savers and fundraising. FinTech could also help to improve payment systems and play an important role in the development of the Capital Markets Union, Estonian finance minister Toomas Toniste stressed. Based on the results of a public consultation launched by the Commission on 23 March of this year (see EUROPE 11752), the ministers stressed the need to support the development of FinTech in order, amongst other things, to improve access to financial services.
However, those attending this informal meeting went on to say that technological innovations could, as in other sectors, also present risks. Although Hansson feels that the risks to financial stability are low, due to the relatively small, albeit growing, size of FinTech, these risks are more tangible for consumers and have a greater impact on cyber-security. To allow the development of FinTech, the ministers therefore agreed on the need to regulate the sector, whilst being careful not to over-regulate in order to avoid penalising innovation, as the Commission suggests in its draft communication on reinforcing the Capital Markets Union, a document that is to be presented this week (see other article). The Governor of the Bank of France, François Villeroy de Galhau, called for rules focusing on cyber-security, mass data and cloud computing, whereas the governors of certain other central banks are calling for technologically neutral rules.
Having agreed on the need to regulate, the debate then focused on the appropriate level at which FinTech should be governed. The ministers' contribution to the debate was relatively modest, allowing several central bank governors to take the floor on the subject. It would appear that most of them support the idea of regulating at EU level, among them the Italian governor, Luigi Federico Signorini, and his Swedish counterpart, Per Jansson.
Valdis Dombrovskis, the Vice-President of the European Commission with responsibility for Financial Stability, announced that the European Commission would present a 'FinTech' action plan early in 2018. (Original version in French by Lucas Tripoteau)