The first ATM appeared in 1967, an example of new banking technology saving customers a huge amount of time. Still - it was essentially a substitute for going into a bank. The real change in banking and finance came with mobile phones. With recent technological advances, a new type of financial services is being created.
Financial services have always used technology, but mobile banking is transformational. From a mobile device, it’s possible to transfer money, obtain a loan or buy shares - a whole new experience for industry, consumers, as well as a new challenge for regulators.
Finance is about data and technology as much as it is about money and capital. FinTech covers a broad area of services. There are many European companies in the growing market, and I believe that there is enough space for both innovative new entrants and traditional institutions.
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Despite operating in such a diverse set of domains, the new FinTech companies share a common attribute: they build and implement technology used to make financial markets and systems more efficient.
If we take a look at what’s happening in the US and Asia, Europe is not yet at the forefront because certain important steps have not yet been taken, and some regulators have not helped innovation.
The Commission should draw up a FinTech action plan within the framework of the capital markets union strategy, with the overall aim of achieving an efficient, deeper, competitive and more integrated European financial system, including financial stability, consumer and investor protection.
By focusing as much as possible on data security and ICT risks, which is important. The Commission should make cyber security the number one priority in the FinTech action plan. We are concerned with security across the whole financial services value chain, such as cyber-attacks that can infiltrate financial markets infrastructure, currencies, and data.
We need a true ‘passporting’ regime in which financial services should be available throughout the EU by means of convergence and harmonisation of regulatory approaches.
Protecting vulnerable customers should be one of the main priorities of all proposals. New communication tools should be easy to use, so that they improve access to financial services for people with disabilities.
Digital skills should go hand in hand with financial education, since both financial and digital literacy are crucial factors for an efficient use of FinTech and for lower risks in the
FinTech environment. Technological solutions should be developed, to provide consumers with guidance on accessing financial services. Therefore, financial and digital literacy programmes in the EU should be encouraged.
The payment sector has been at the forefront of innovation and competition between banks, non-bank providers, merchants, telecommunication companies and other market entrants.
Some central banks are already experimenting with virtual currencies as well as other new technologies. The relevant authorities in Europe should also experiment, to keep up with market developments.
To conclude, I believe there is a need for a close and regular dialogue between banks, FinTech companies, and regulators. We still have unanswered question such as: how will Brexit change the European FinTech environment?
The European Union must be at the forefront of this new phenomenon. FinTech companies are growing and they bring innovation. Banking is changing. The best option for both sides is to work together.