Today, the European Commission (EC) presented a communication on “a Digital Finance Strategy for Europe”, a key priority for the EC. The strategy builds on the EC’s 2018 FinTech Action Plan and technical work of the European Supervisory Authorities (ESAs). The communication sets out a strategic objective for digital finance in Europe and four priorities with related actions to ensure the benefits of digital finance are available to European consumers and businesses while also mitigating risks.
Insurance Ireland and its members believe that an ambitious digital finance strategy is of great value to European consumers and businesses alike, even more so following the unprecedent situation caused by the Covid-19 pandemic. As mentioned in the EC communication, digital solutions have been invaluable to both consumers and businesses across the EU during the pandemic. II agree that digital infrastructure has allowed consumers to be able to verify identity online and access financial services. It has enabled a significant growth in e-commerce and it has provided for a successful shift to remote working for a large portion of organisations.
II strongly supports the EC first priority to remove fragmentation in the in the Digital Single Market. The EC envisions that the legal framework will enable a more streamlined on-boarding process by increased harmonisation of AML/CTF rules and a revised framework for electronic identification and trust services for electronic transactions (e-IDAS Regulation). The Irish insurance industry welcomes these plans to allow for optimal use of customer data with fully informed and transparent consent.
Regarding the EC’s response to recommendations for a more innovation friendly regulatory environment, II supports the EC’s proposed new EU legislative framework for crypto assets. With regards to more technology neutral regulation, Insurance Ireland views the EC’s plans to review legislation more frequently and to issue interpretative guidance on how existing legislation on financial legislation is to be applied to new technologies, as a positive development. Nonetheless, we would like to see a more pro-active approach to ensuring a technology neutral and innovation friendly environment.
Insurance Ireland welcomes the EC’s plans to establish a common financial data space and broader access to public and private data. We commend the steps towards enhanced data sharing and openness across and within sectors, in compliance with data protection and competition rules. We believe this will be essential for the financial sector to fully embrace data-driven innovation.
The Irish insurance industry supports the approach of the EC to uphold the “same business, same risk, same rules” principle in committing to adapt the existing conduct and prudential EU legal framework to create a true level playing field while maintaining consumer protection and financial stability. The EC’s engagement with the European Central Bank, national central banks and national competent authorities is vital in this respect.
Insurance Ireland fully supports that the EC is closely linking its core initiatives integrating European capital markets, channelling investments into sustainable activities, supporting innovation and bringing efficiencies for consumers and businesses. Both the sustainable finance agenda and the Capital Markets Union are key priorities for II. It is encouraging to see the EC’s work to integrate these workstreams.
Finally, the EC’s recognition of the importance of reinforcing digital operational resilience is encouraging. The Covid-19 pandemic and the measures taken to prevent the further spread of the virus significantly increased our society’s and economy’s reliance on secure digital remote technologies as a result of the Covid 19 pandemic. The ability to maintain operational in this extraordinarily challenging period was a strong asset of the EU financial services sector.
Insurance Ireland and its members look forward to engaging with the EC and stakeholder as they work to realise a Digital Finance Strategy for Europe.