Recommendations to address regulatory obstacles to financial innovation


It has been confirmed that fintech will remain on the agenda of the European Commission for the next mandate under the leadership of Vice-President Valdis Dombrovskis. In March 2018, the European Commission published its first FinTech action plan, which included the creation of the Expert Group on Regulatory Obstacles to Financial Innovation (ROFIEG). On 13 December, the Expert Group published 30 recommendations, covering a very broad range of issues, market players, technologies, but also policy areas including “the prevention of money laundering and terrorist financing (‘AML/CFT’), consumer protection, data sharing and use, and governance and operational resilience within the financial sector”.

The report will most likely be instrumental in the drafting of the European FinTech Strategy expected in the upcoming mandate.

The recommendations focus on three aspects:

  • An accommodative framework for FinTech in the EU, that could bring new benefits in terms of lower costs, new products and services, accessibility, effective regulation and compliance;
  • Tackling potential risks and developing adequate safeguards;
  • Ensuring the EU’s competitiveness and sovereignty as a global standard setter – continuing to develop a narrative already used when dealing with Artificial intelligence.

The report groups the recommendations in four key categories:

  • “First, the need to adapt regulation to respond to new and changed risks caused by the use of innovative technologies, such as AI and DLT, and take up any emerging opportunities with respect to RegTech or SupTech (Recommendations 1-12);
  • Second, the need to remove regulatory fragmentation and ensure a level playing field between incumbents and new market entrants, both FinTech start-ups and BigTech firms, across the entire EU (Recommendations 13-24);
  • Third, the necessity to reconcile the regulation of personal and non-personal data with the opportunities and risks offered by FinTech (Recommendations 25-28);
  • Fourth, the need to consider the potential impacts of FinTech from the perspective of financial inclusion and the ethical use of data (Recommendations 29-30);”

Ecommerce Europe welcomes the report’s call for technology-neutral regulation and international cooperation for standard-setting to ensure interoperability and a level-playing field.