02 February 2021

European Commission: Request to EBA, EIOPA and ESMA for technical advice on digital finance and related issues

Digitalisation is transforming society, the economy and the financial sector. This transformation, and the application of innovative technologies in the EU financial sector, has the potential to benefit people and companies

1. Context and scope

However, it may also make it more challenging for the existing regulatory and supervisory frameworks to safeguard financial stability, consumer protection, market integrity, fair competition and security. The digital finance strategy (DFS) adopted in September 2020 therefore set out the Commission’s intention to review the existing financial services legislative frameworks in order to protect consumers and safeguard financial stability, protect the integrity of the EU financial sectors and ensure a level playing field. To prepare these actions, the Commission is requesting advice from the European supervisory authorities (ESAs) on how to address “same activity, same risk, same rules” issues, more fragmented value chains, the scope of the supervisory perimeters, the prudential risks related to non-bank lending and the protection of clients’ funds.
As one of the four priority areas and alongside other actions, the DFS sets out the Commission’s ambition to adapt the EU’s prudential and conduct regulation and supervision frameworks to be future proof for the new financial ecosystem, including traditional financial undertakings, technology providers and other new entrants offering financial services.

Boosting digital finance would support Europe’s economic recovery strategy and the broader economic transformation. It would open up new channels to mobilise funding in support of the Green Deal, Capital Markets Union and the New Industrial Strategy for Europe. To this end, the DFS sets out a series of steps to facilitate the digital transformation of the EU financial sector in accordance with the principle of technological neutrality and a risk-based approach to financial sector regulation and supervision. This means that no technology should be given a preference over another. At the same time, the use of innovative technology should not be prevented due to inadvertent regulatory or supervisory barriers; an approach that is also neutral towards incumbents and new entrants....

Full request

European Commission

© European Commission