European FinTech is thriving. However, The European Banking Authority (EBA) believes the European Commission should do more to make it flourish across the EU.
In a new report, the EBA has identified the factors that hold European banking and payment companies back.
It noted that one of the issues that keep FinTech businesses in the different EU member states is that the regulatory requirements in different nations may differ. These issues were related to authorisations and licencing, consumer protection, conduct of business requirements and anti-money laundering and countering the financing of terrorism.
The EBA also stated that one of the issues demanding clarification was when a digital activity is to be regarded as a cross-border provision of services. It suggested that more guidance about this was needed.
The second challenge stems from areas of EU law that are not fully harmonised or are not yet covered by EU law.
The EBA therefore suggested that identifying and resolving these issues is a necessary step to addressing barriers to market entry, supporting the scaling up of financial services across the EU, and improving the competitiveness of the EU Single Market.
The report also urged the European Commission to take action to empower FinTech operators to access opportunities across the borders of the different member states.
This encouraged push would include updating interpretative communications on the cross-border provision of services and further harmonisation of consumer protection, conduct of business and AML/CFT requirements.
By doing that, the EBA report believed that FinTech operators would be able to scale their cross-border activities.
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