On 29th October 2019 the European Banking authority (EBA) published a report identifying potential impediments to the cross-border provision of banking and payment services in the EU. The report is based on the European Commission FinTech Action Plan and the EBA FinTech Roadmap, both published in March 2018.
It has been a long-term and crucial objective of the EU Single Market to enable cross-border provision of services. In some areas the EU law is highly prescriptive in order to mitigate financial stability and market integrity risks while in some other areas Member States and competent authorities have discretion and thus divergences may arise.
The report focuses on the areas which may potentially create complexities that impede consumer choice and the cross-border provision of services. The EBA discovered that first of all it is necessary to identify whether an activity is a cross-border service and, if it is, whether it is carried out under the ‘freedom to provide services’ or ‘right of establishment’. The importance of this issue is increasing as financial services are being still more and more provided using digital means (internet desk top or mobile apps).
The EBA stresses the need to promote greater convergence of practices in determining when business is to be regarded as being provided cross-border. Furthermore, the EBA has identified some issues in the areas of authorisations and licencing, consumer protection, conduct of business requirements and anti-money laundering (AML) and countering the financing of terrorism (CFT). The EBA proposes greater harmonisation at Level 1 legislation, e.g. strengthening requirements to report on a more uniform and timely basis the cross-border activities or promoting awareness of the applicable regulatory requirements imposed in host jurisdiction. The EBA admits that further analysis could be useful on the causes and the materiality of the issues identified.
20-12-2019