The European Banking Authority is to establish a Fintech Knowledge Hub as part of its Roadmap for getting to grips with new tech-led developments in financial services.
The Roadmap sketches out the EBA's priorities for monitoring emerging trends and analysing the impact on incumbent institutions' business models.
Key to this will be a thoroughgoing assessment of current authorisation and licencing approaches to finech firms and a best practice guide for regulatory sandboxes and innovation hubs.
The EBA says it wants to address consumer issues arising from fintech development "in particular in the areas of unclear regulatory status of fintech firms and related disclosure to consumers, potential national barriers preventing fintech firms from scaling up services to consumers across the single market, and the appropriateness of the current regulatory framework for virtual currencies".
In a preview ahead of the publication of the Roadmap, EBA chairperson Andrea Enria last week said the Authority was minded to avoid granting any official regulation to the cryptocurrency sector, instead using existing rules on anti-money laundering to protect consumers and barring banks from dealing in virtual currencies.
While ensuring that fintech firms and the services that they are offer are properly governed, Enria was keen to stress that these companies should not be treated the same as banks, which provide liquidity, debit and credit: "An excessive extension of the regulatory perimeter, attracting most fintech firms under the scope of bank-like supervision just because they compete with banks in some market segment, is likely to be a sub-optimal solution."
In terms of security and financial stability, the EBA intends to additionally promote a common cyber threat testing framework and identify money laundering/terrorist financing risks associated with regulated fintech firms, technology providers and business models.
Says Enria: "The EBA's Knowledge Hub will ensure that EU supervisors share best practices and adopt a technologically neutral approach to the application of new technologies in the financial sector. This will help facilitate innovation and scalability across the single market."
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