Authors: Roberto Viola (Director General DG Connect) / Olivier Guersent (Director General DG FISMA)
Digital technologies are changing the way we interact with friends and colleagues, access content and consume. All players of the financial services industry are indeed being disrupted, like in any other sector. Many financial services are already available online or on mobile apps. However, there is still substantial untapped disruption potential. It can affect the whole financial services ecosystem. More changes are on their way with the advent of new agile innovative players with new business models, user-friendly consumer interfaces, peer to peer services, or advanced automated tools.
FinTech is often used to describe technology-enabled finance, be it payments, lending, raising capital and investment management, foreign exchange and money transfer, and robot advisers. It also includes InsurTech, the application of digital technology to insurance, and RegTech, its application to regulatory compliance. The Fintech revolution as we are experiencing it right now really is the result of a confluence of technological developments that have come to the market. They are ranging from continuing increase in processing and storage capacity, cloud computing, social network and platform technologies, artificial intelligence, mobile technologies or distributed ledger technology or blockchain which is high on the agenda of the whole sector.
The potential of technology to drive efficiency gains and disintermediation of financial services can bring consumer benefits and competitive advantages for agile banks and startups.
It also raises questions on the way that finance operations are implemented, supported, secured and regulated. There is much talk of regulatory sandboxes, level playing fields, and how to take advantage of technologies in highly regulated domains like finance.
The current transformation affects existing financial institutions,as well as the new players, such as FinTech startups or large internet platforms. The challenge is both to lay down the right conditions to support innovation and for a future-proof environment to emerge.
In order to help FinTech innovation reach its full potential with Europe playing a leading role, while ensuring financial stability and consumer confidence, we are pleased to announce that the European Commission is setting up a Financial Technology Task Force (FTTF). Co-chaired by DG FISMA and DG CONNECT, the Task Force brings together services responsible for financial regulation and for the Digital Single Market, along with other colleagues dealing with competition and consumer protection policy. It will further engage outside experts and stakeholders with the aim to formulate policy-oriented recommendations and propose measures in the course of 2017.