Financial technology has never been a primary concern for the European Commission.That has always been surprising considering how other regions pay a lot of attention to fintech. Thanks to a supervisory shakeup, that situation is now coming to change. More specifically, the EC wants to focus on new technology developments and fintech. A more than welcome change, to say the least.
There are quite a few benefits to an increased focus on fintech. Not only does it bring more competition tot het able, but it also creates jobs. If there is one thing the European struggles with, it is job creation. Especially in the financial sector, things are due to be shaken up quite significantly. Paving the way for further financial integration and a full Capital Markets Union are the two priorities for the EC right now.
European Commission Prepares to Embrace Fintech
Fostering fintech development is an interesting decision. Although the European Commission never opposed the idea, they hardly encouraged it either. Despite Europe being home to hundreds of startups, there was little incentive to explore the fintech sector. With these reforms bound to take place in the near future, that situation will slowly improve. Do not expect miracles to happen overnight, though, as these changes will roll out gradually.
Capital Markets Union’s Valdis Dombrovskis comments as follows:
“Financial markets are changing fast. We are seeing renewed cross-border integration, new opportunities in fintech and a boom in sustainable and green finance. The EU needs to act as one player so that we can stay ahead of the curve. More integrated financial supervision will make the Economic and Monetary Union more resilient. These pragmatic proposals will also make it easier for our companies to operate cross-border and build consumer trust.”
It is worth mentioning this change of heart doesn’t occur naturally. The European Commission undertook a public consultation earlier this year. The objective was to collect feedback on how new technology developments will impact the financial sector. Interestingly enough, there was a growing demand for innovation and competition. It will be interesting to see how the developments play out. This first step by the European Commission is definitely the right decision.