At the launch of the Consumer Financial Services Action Plan on 23 March 2017, Valdis Dombrovskis, Vice-President responsible for Financial Stability, Financial Services and Capital Markets Union said European consumers ''should have access to the best products available across the EU, not just within their own country''. With the action plan, the European Commission is aiming to achieve just that. The message is clear: the Commission is looking to reduce barriers to business between Member States so all European consumers and firms can take full advantage of a true single market.

Rebuilding consumer confidence

Financial services are an integral part of consumers' daily lives. We all have bank accounts to keep our money, payment cards to pay for clothes or groceries; we use credit to finance bigger purchases and insurance to protect ourselves and our families against unpleasant surprises. 

Following the financial crisis, the EU put significant effort into restoring consumer confidence. Legislation such as the Mortgage Credit Directive, the Payment Account Directive and the revised Payment Services Directive improve transparency, give everyone the right to basic banking services, enhance competition and ensure a higher level of security while making payments.

Some improvements can already be detected. The 2016 edition of the European Commission's Consumer Market Scoreboards saw considerable progress in the performance of banking services. Indicators improved for all financial services, including bank accounts, loans, credit and credit cards, and mortgages. The 2016 Special Eurobarometer 446 recorded a rise in the share of consumers who had purchased at least one financial service in another Member State from 5% in 2011 to 7% in 2016.

12 actions for further improvement

Still, 'banking services' continue to be a poorly performing cluster in the Scoreboard; and 7% of consumers buying financial services across borders is still a very low figure. The markets for retail financial services remain fragmented, for consumers and providers alike. With the action plan, the Commission has identified three areas for further work in order to achieve a true single market for consumer financial services. These are increasing consumer trust and empowering consumers, reducing legal and regulatory obstacles affecting businesses and supporting the development of an innovative digital world in which better financial services can be delivered more efficiently to a wider range of consumers.

More specifically, the action plan sets out twelve actions to be taken before 2019. For instance, the Commission plans to propose amendments to the regulation on cross-border payments to reduce the costs of cross-border transactions in all currencies, not only euros. It will assess whether the differences between domestic and cross-border transaction fees are excessive or in line with the actual costs to payment service providers. It will also study how to make new currency conversion options (Dynamic Currency Conversion) more transparent, so consumers can make better-informed decisions when choosing their payment method. The Commission wants to make it easier for motorists to have their good driving records recognised when they move to another country, so they don't lose the discounts on car insurance premia, the so-called 'no-claims bonus'. It will also take steps towards more transparent pricing of car rental insurance, so consumers know the full price they are expected to pay before they reach the car rental desk.

Since the action plan's adoption, the Commission has started working on the implementation of each individual action to ensure that financial services providers can easily offer their services across Europe and consumers can get the best deals while being well protected in the future.

Read more on the Action Plan on Consumer Financial Services