Europe is making significant strides towards positioning itself as the world’s leading region in the fast-growing fintech market.
In February, the European Commission announced the launch of the EU Blockchain Observatory and Forum, which will:
The following month, though, the Commission raised the bar by unveiling its long-gestating Fintech Action Plan. This will take a much broader perspective, ranging out from blockchain to encompass the full range of technologies, services and regulatory activities that fall under the fintech banner.
As the Commission announced, the Action Plan will have “important synergies” with a range of European initiatives in the finance arena, such as the digital single market strategy, the EU Cybersecurity Strategy, the Consumer Financial Services Action Plan and Capital Markets Union.
The Commission noted: “Europe’s regulatory and supervisory frameworks should allow firms operating in the EU Single Market to benefit from financial innovation and provide their customers with the most suitable and accessible products.
“Such frameworks should also ensure a high level of protection for consumers and investors, and ensure the resilience and integrity of the financial system.”
With those aims in mind, the Action Plan will play out along the following work streams:
Commissioner for the digital economy and society Mariya Gabriel said: “Digital technologies have an impact on our whole economy – citizens and businesses alike. Technologies like blockchain can be game changers for financial services and beyond. We need to build an enabling framework to let innovation flourish, while managing risks and protecting consumers.”
On the same day it announced the Action Plan, the Commission also published landmark proposals for regulating Europe’s crowdfunding sector.
By helping to provide start-ups of all types with seed money for their launches, crowdfunding is increasingly seen as a gateway for enabling firms to build the required credibility to secure further, more professional investment from angels or venture capital groups.
The Commission pointed out that it is currently difficult for many crowdfunding platforms to expand from one EU country to another – and a lack of common, EU rules considerably raises providers’ compliance and operational costs. Consequently, compared to its status in other, major world economies, crowdfunding in the EU is underdeveloped and fragmented.
As such, the proposed regulation aims to make it easier for platforms to offer their services across the EU by enabling them to apply for a label based upon a single set of rules. That label will act as a region-wide licence, removing those current, cross-border hurdles.
Commission vice-president for jobs, growth, investment and competitiveness Jyrki Katainen said: “New technologies are transforming the financial industry by revolutionising the way people access financial services. Alternative sources of funding, such as crowdfunding or peer-to-peer lending, directly link savings with investments.
“They make the market more accessible for innovative entrepreneurs, start-ups and small companies. This objective is at the heart of the Capital Markets Union.”
Find full details of the EU’s Fintech Action Plan here.
Click here for the full text of the proposed crowdfunding regulation.