The European Commission (Commission) has published a summary of the contributions to its March 2017 consultation, FinTech: a more competitive and innovative European financial sector. The purpose of the consultation was to seek input from stakeholders to further develop the Commission’s policy approach towards technological innovation in financial services.

Key messages from the feedback to the consultation include:

• FinTech and technological innovation in general, were drivers of financial sector development and that there were huge opportunities in terms of access to finance, operational efficiency, cost-saving and competition;
• on the risk side, the predominant themes raised were cybersecurity, the use and control of data and money laundering;
• distributed ledger technology, big data analytics, artificial intelligence and cloud computing were technologies meriting authorities’ attention, for which certain initiatives at EU level in the short or mid-term may be considered; and
• the main areas where there was broad support for EU level action were: (i) a clear EU framework for crowd- and peer-to-peer financing; (ii) more clarity and convergence across the EU on how supervisors handle licencing, outsourcing, in particular to cloud services, and support for innovation (e.g. innovation hubs); (iii) more developed interoperability and standardisation; and (iv) enhanced cybersecurity.

In relation to artificial intelligence and big data analytics for automated advice and execution the feedback included:

• automated advice was still in the early stage of development and was not equally spread across sectors or across the EU. However, most respondents considered that it had the potential to reach a greater number of customers, thus enhancing financial inclusion;
• views were divided on the need for common rules for oversight of automated decision-making;
• in relation to the amount of information that should be included in algorithms for investment decision, industry respondents and public authorities called for technologically neutral approaches; and
• the main risks stemming from the use of artificial intelligence and big data analytics in financial services, respondents identified mainly risks associated to cybersecurity, data protection, discrimination, lack of transparency and liability issues. The suggested main possible solutions to mitigate the new risks were: a robust cybersecurity strategy, adequate controls in the use of data, a high level of privacy, same requirements as applied to human advisers and a clear liability regime in case of legal disputes linked to advice received via fully automated tools.

In relation to funding from the crowd the feedback included:

• most respondents believed that national regulatory regimes hindered cross-border crowdfunding activity and that EU-level harmonisation was required;
• among the potential areas for harmonisation were platforms’ disclosure requirements, registration requirements and consumer and investor protection rules; and
• to support further FinTech solutions in this field, respondents suggested developing regulatory sandboxes with harmonised criteria so that solutions developed in one Member State could be passported.

A further summary of the of the contributions received to the individual questions is set out in the annex.

View European Commission summary of contributions to its consultation on fintech, 12 September 2017

View Annex to European Commission summary of contributions to its consultation on fintech, 12 September 2017