European Commission Sets Up FinTech Task Force

The FinTech industry is changing quickly, and the European Commission knows it.

By creating a financial technology task force, the Commission said it is responding to the effects of digital innovations changing the banking industry. The force will be chaired by both DG Fima and DG Connect and will connect with market participants and delve into financial regulation, competition and consumer protection issues.

As the task force is ultimately focused on constructing policies and other related recommendations, the Commission said the industry landscape and impending transformations can affect both current and new financial institutions. And accordingly, it added, the challenge straddles creating the fundamental conditions to support innovation while engendering a future product to develop.

“Banks have a fundamental role to play in our society,” said EC vice president Valdis Dombrovskis said in a speech this week. “We depend on their lending for companies to invest, remain competitive and sell into bigger markets and so that households can plan ahead. In practice, this means the European Commission is focused on maintaining a regulatory framework that encourages a banking sector that is stable, sustainable, diverse and integrated.”

He said that across the banking sector, there is no scale or, in many cases, even the expertise to “make the most of technological change.” Because digital payments and innovations evolving, banks across Europe will need to focus on digital innovations and find ways to incorporate into current business models.

“We want to foster innovation, give businesses the space to adapt and make the most of it,” said Dombrovskis. “But we need to monitor changes closely to keep our existing rules fit for purpose.”