07 February 2022

The ESAs recommend actions to ensure the EU’s regulatory and supervisory framework remains fit-for-purpose in the digital age

The three European Supervisory Authorities (EBA, EIOPA and ESMA) published today a joint report in response to the European Commission’s February 2021 Call for Advice on Digital Finance. The proposals put forward aim at maintaining a high level of consumer protection and addressing risks arising from the transformation of value chains, platformisation and the emergence of new ‘mixed-activity groups’ i.e. groups combining financial and non-financial activities.

The ESAs note that the use of innovative technologies in the EU financial sector is facilitating changes to value chains, that dependencies on digital platforms are increasing rapidly, and that new mixed-activity groups are emerging. These trends open up a range of opportunities for both EU consumers and financial institutions, but also pose new risks.

Therefore, the ESAs recommend rapid action to ensure that the EU’s financial services regulatory and supervisory framework remains fit-for-purpose in the digital age.

The proposals include:

• a holistic approach to the regulation and supervision of the financial services value chain;
• strengthened consumer protection in a digital context, including through enhanced disclosures, complaints handling mechanisms, measures aimed at preventing the mis-selling of tied/bundled products, and improved digital and financial literacy;
• further convergence in the classification of cross-border services;
• further convergence in addressing money laundering/financing of terrorism risks in a digital context;
• effective regulation and supervision of ‘mixed-activity groups’, including a review of prudential consolidation requirements;
• strengthened supervisory resources and cooperation between financial and other relevant authorities, including on a cross-border and multi-disciplinary basis; and
• active monitoring of the use of social media in financial services.

Report

EIOPA

© EIOPA