On 27 January, the Economic and Monetary Affairs (ECON) Committee of the European Parliament published the own-initiative draft report on FinTech and the role of technology in the financial sector, written by rapporteur Cora van Nieuwenhuizen (ALDE, the Netherlands).
In the draft report, MEP van Nieuwenhuizen emphasizes the rapid development of the FinTech sector, and the need for a European regulatory framework to address the specific issues produced by the sector. In general, Ecommerce Europe welcomes the draft report as a reflection of the European Parliament’s recognition of the importance of FinTech to the future of the payments landscape.
The need for an EU framework
The draft report emphasizes the need for a European regulatory framework for FinTech, which it argues has become a core element of a modern digital society. The draft report, which does not propose specific legislative proposals, calls on the Commission to publish an action plan for FinTech. MEP van Nieuwenhuizen stresses the importance that future new regulation will not increase administrative burdens faced by online merchants or impair the development of innovative electronic payment solutions.
Ecommerce Europe welcomes the draft report’s emphasis on a forward-looking, future-proof regulatory framework. To prevent legal uncertainty and ensure online merchants’ and consumers’ trust into FinTech solutions, it is important to ensure that the legal framework facilitates and keeps up with the fast pace of technological developments.
MEP van Nieuwenhuizen also emphasizes the importance of interoperability to the development of the financial sector in Europe. For example, the draft report stresses the importance of the creation of a standardized set of application programming interfaces (APIs), and calls for the development of an interoperable framework of national e-Identification schemes.
Ecommerce Europe welcomes policy-makers’ appreciation of the issues of interoperability in the European payments landscape and the importance of interoperable payment systems to the growth of cross-border e-commerce in Europe. Ecommerce Europe has been active in advocating for a standardized framework for APIs, including through co-Chairing a current Working Group on the standardization of Payment Initiation Services at the European Central Bank’s Euro Retail Payments Board (ERPB).
Meanwhile, Ecommerce Europe also strongly supports the interoperability between national e-Identification schemes, which could provide a significant boost for security, convenience and trust in the European cross-border e-commerce market.
FinTech and Data
The draft report highlights the issues surrounding data and its role to the FinTech sector, and, in particular, emphasizes the need to ensure coherence between FinTech companies’ need for access to customer data and the EU’s General Data Protection Regulation. In this respect, Ms. van Nieuwenhuizen highlights the crucial need for a legal clarification of the issues of data ownership and liability.
Finally, the draft report identifies the need to strengthen digital skills in the financial sector in order to facilitate Europe’s position in driving developments in financial technologies. It therefore calls on the Commission to address this issue in the implementation of the New Skills Agenda and the Digital Skills and Jobs Coalition.
Ecommerce Europe echoes this perspective, believing that digital skills are vital for Europe’s future innovation and economic growth. It is important for the competitiveness of the European economy to ensure that the labor market adapts to the needs of the digital economy.
Moving forward, the draft report will be voted on in the ECON Committee on 10 April. If it is adopted in committee, it will be scheduled for a vote in the plenary session of the European Parliament. As an own-initiative report, if adopted, it will be legally non-binding, but will serve as a statement of the position of the European Parliament, and will help to inform the work of the Commission, which set up a FinTech taskforce in late 2016.