The European Association of Co-operative Banks (EACB) participated with great interest in the Commission consultation on the New Digital Finance Strategy for Europe. The EACB and its members in principle share the Commission view about an EU coordinated strategy for the European financial sector facing global competition. European banks and financial institutes have been at the forefront of innovation and digitalization for decades in order serve consumers and firms in an efficient, safe, sound and sustainable manner. Today, nealy all financial transaction are digital: from payments and securities transactions to consumer finance or online insurances - with few exceptions such as cash. European consumers and firms are able to reap the benefits from digitalization, but always have the choice of their prefered channels, and are adequately protected from risks due to existing regulation of financial products and services.
The principle of “same business, same risks, same rules, same regulation” is crucial to avoid that the financial sector with its consumer protection is bypassed by “non-banking institutions” and/or global FinTech players. Consequently, the usage of a specific technologies does not justify new policy measures for single silos with the danger of regulatory fragmentation instread of technology neutrality. The financial services industry is a highly regulated industry, and existing regulation coveres all sectors from e.g. payments and E-money (with PSD2/EMD2) to securities and investment funds (with MiFiD2/UCITS-V et cetera). Primarily technology-based regulation would come with the obstacles of unlevelled playing field, fragmentation, competitive imbalances or missing clarity for consumers.
Any future actions, initiatives or policy measures should be based on the European principles of a market economy, self-regulation, subsidiary and proportionality. As European banks have to compete in a global market and especially co-opeartive banks are serving the local European economy also in times of crisis, any additional regulation - if needed - has to protect the business model of banks in Europe including such of the co-operative banks.