Jan Ceyssens is Head of the “Digital Finance” Unit in the Directorate General for Financial Stability, Financial Services and Capital Markets Union at the European Commission. He was previously Member and Deputy Head of the Cabinet of Vice President Dombrovskis and Member of the Cabinet of Vice-President Barnier, and Team Leader for Financial Supervision at the European Commission's Internal Markets and Services Directorate General. He graduated in law from Humboldt University in Berlin and holds a Master’s degree in European Law from King's College London. He works at the European Commission since 2006, initially in the Directorate General for Competition's Cartels enforcement Directorate and since 2009 in the Internal Markets and Services Directorate General.
Communication on a digital finance strategy for the EU. Why did the European Commission adopt this Communication right now?
Our strategy is based on the realization that the future of finance is digital: consumers and businesses are more and more accessing financial services digitally, innovative market participants are deploying new technologies, and existing business models are changing. Digital finance has helped citizens and businesses tackle the unprecedented situation created by the Covid-19 pandemic. For example, online identity verification has enabled consumers to open accounts and use multiple financial services at a distance. A growing proportion of in-store payments are now digital and contactless, and online purchases (e-commerce) have significantly increased. Fintech solutions have helped to broaden and speed up access to loans, including loans supported by government in response to the Covid-19 crisis.
This is just the latest evidence that digital finance has a lot to offer, and we have seen that the overwhelming number of people and businesses in Europe are ready for going digital in managing their finances.
This is an opportunity for Europe and for our recovery strategy to help repair the social and economic damage brought by the pandemic. Digital technologies will be key for relaunching and modernising the European economy across sectors. It will move Europe forward as a global digital player. At the same time, users of financial services must be protected against risks stemming from increased reliance on digital finance. Our Digital Finance Strategy sets out that Europe should aim to lead on digital finance, and what we as the Commission and the EU will do to support this.
The communication on a digital finance strategy for the EU embraces open banking and electronic identity, including a proposal for a legal framework enabling the use of interoperable digital identity solutions to facilitate consumers a quick and easy access to financial services. Which objectives drive the European Commission’s strategy in the area of open banking and electronic identity?
I think well-functioning digital identification solutions, and access to and use of data are among the crucial factors which will determine if Europe will play a leading role on digital finance and innovation in the future.
The recent lockdown has highlighted just how essential electronic identification is for finance to work digitally. Overall it has worked, but there is much to improve to make this an easy-to-use but still secure identification. To enable this, we will put in place the conditions allowing the financial sector to provide remote ‘on-boarding’ and identification solutions effectively and seamlessly, including in cross-border contexts. A key element here is to harmonise customer due diligence requirements in the context of Anti-Money-Laundering controls, and we will come forward with proposals on this in early 2021. Electronic identification is also relevant far beyond finance, and as you know Commission President Ursula Von der Leyen announced proposals for a European Digital Identity. If the financial sector develops well-functioning systems, this opens up opportunities for banks to play a role as a “curator of digital identities” also beyond finance.
On open banking, I do think that data-driven business models are the future of finance. Unless you are one of the very few global platforms, it will not be sufficient for any operator to rely just on the data which you hold yourself. So the question is not if we want more data sharing, but how we organize and regulate it. PSD2 was a big step for the European financial sector, and we are now gathering our experiences with it, and will review these experiences in due course. At the same time, the Commission will come forward with some broader cross-sectoral proposals in the context of the European Data Strategy and the Digital Services Act. On that basis we will then have to decide about the shape of Europe’s regulatory framework for Open Finance.
What is, in your opinion, the role that European cooperative banks can play to support the achievement of the objectives of the digital finance strategy for the EU, considering their importance in local economies, communities and their proximity to clients?
I would like to turn your question around: the Digital Finance Strategy is our best offer to support the financial sector, and among it the co-operative banks, in tackling digital transformation. So my biggest hope is that European co-operative banks are pursing and accelerating this transformation in their businesses, in cooperation with other companies and actors in our financial ecosystem. As banks with a strong local anchorage, co-operative banks are very well placed to understand what customers and businesses really want. I would hope that you will work to combine this with a European perspective, which is equally necessary today to develop leading digital finance products.