Virtually every nation, country, city, and overarching governmental body is looking closely at the fintech sector right now. The European Commission has set up an internal fintech task force to examine how digital innovation is affecting the financial sector. This seems to indicate that new regulatory measures are on the horizon for European fintech incumbents.
European Commission Keeps Tabs On Fintech
Up until this point, the European Commission has been rather quiet on the fintech regulation front. Even currencies such as Bitcoin enjoy an open-minded regulatory appeal, as there is no taxation of cryptocurrency payments just yet. In fact, it appears that Europe is rather open-minded when it comes to fintech in general, but that situation may come to change soon.
Together with DG Fisma and DG Connect, the new EC fintech task force will bring together services active in financial regulation. Additionally, experts will weigh in on the current developments and the eventual need for adapted regulatory guidelines. Recommendations and measures will be formulated at some point during 2017, indicating that no immediate changes will take place.
The fintech sector is disrupting the financial industry as we know it today. To be more precise, the banking industry is under threat from these incumbent companies who challenge traditional business models. While this does not pose an immediate threat to banking just yet, it is clear that battle lines need to be redrawn.
For now, the current trend seems to be the partnering of banks with fintech startups to create new financial services and products. While this may result in losing some innovative concepts along the way, it is a strategy that works well for all parties involved. Not every fintech startup, however, wants to collaborate, and those forging their own path are quickly gaining traction.
European Commission VP Valdis Dombrovskis stated:
“It is clear that parts of our banking sector do not have the scale, or in some cases the expertise, to make the most of technological change. Digital payments and other innovations are developing rapidly. European banks will have to seize on digital innovations and work them into their business models.”
It is positive to see the European Commission paying attention to the transformation affecting the financial sector. Business and startups need to be given breathing room to grow and innovate instead of being burdened with regulation. That being said, times are changing, and keeping up with recent developments is an absolute must.
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