On 4 July 2023, the European Banking Authority (EBA) published a speech by Jose Manuel Campa, Chairperson of the EBA, at the Central Bank of Cyprus, where he discussed FinTech and the future of financial intermediation.

In his speech, Mr Manuel Campa made the following remarks:

  • The EBA’s regular innovation monitoring work shows that, to date, the emergence of genuinely novel types of products and services has been rather limited, albeit the EBA certainly expect an uptick in cryptoasset issuance and service provision, following the entry into force of the Markets in Crypto-assets Regulation (MiCA).
  • In order to leverage the opportunities that FinTech offers responsibly, industry, supervisors and regulators need to be proactive in identifying, monitoring and mitigating risks that are often multi-faceted and inter-related.
  • The use of digital channels to market and provide access to financial products and services may pose risks to consumer protection in the event of ineffective disclosures of product features.
  • Risks may also arise in the context of product and service bundling, resulting in the sale of unsuitable or unduly costly products and services to consumers.
  • Operational risk can be elevated through increased dependencies on technologies, including those provided by third parties.
  • The EBA expects financial institutions who are increasing their reliance on innovative technologies to implement a commensurate ‘skilling up’ on technology, risks, and risk mitigation techniques at the level of the management body and throughout institutions. The EBA also expects financial institutions to have in place updated and robust risk management frameworks.
  • The EBA is taking action to ensure that money laundering and terrorist financing (ML/TF) risks are tackled holistically across the cryptoasset sector. Notably, this means that the EBA will revise its existing anti-money laundering and counter terrorist financing guidelines, including the fund transfers guidelines and the ML/TF risk factor guidelines.