A Roadmap for EU Fintech Regulation
The debate on regulating innovation is often laden with prejudices and undue simplifications. Chair of the EBA, Andrea Enria, recently spoke on how the European Banking Authority expects supervision and regulation of the Fintech market will work. Identifying the inherent problems of both the strict need to protect the financial system and citizens and the requirement for a more ‘laissez-faire’ approach to innovation supervision, the new roadmap instead aims to be ‘rigorous but proportionate’.
The EBA’s new approach is designed to ensure the proper policing of the perimeter, accommodative but safe sandbox regimes, and the sharing of intelligence and best practices.
It is hoped that these solutions will also bring Fintech innovation closer to having across-the-board, pan-European application and access to markets.
With the increased attention towards current issues such as cryptocurrencies and crowdfunding, the EBA expects there will be a need for heightened monitoring and rigorous analysis in the coming years. Through an increased focus on the interconnections between new Fintech firms and traditional regulated entities, the EBA seeks to increase its capacity to mitigate the possibility of risks outside the existing radar screen of supervisory authorities.
The new roadmap seeks to address six principal areas including: Authorisation and Regulatory Perimeter issues; Sandboxes and Innovation Hubs; Business Models, Prudential Risks and Opportunities; Cybersecurity; Consumer and Conduct issues; and Anti-Money Laundering.
Read the full speech about the new Fintech Roadmap here.