An avalanche of legislative proposals on Retail Investment Strategy (RIS), Financial Data Access (FIDA) and the Digital Euro released in spring 2023, coupled with the European Digital Identity regulation released earlier in 2021, left virtually no aspect of retail banking untouched.
For cooperative banks as main retail banks, these proposals served as a catalyst for holistic reflective analysis on their combined impact on the retail banking sector.
EACB members tackled reflections head-on establishing a new Taskforce on the Future of Retail Banking. Leveraging the expertise and complementing perspectives of technical leaders across the cooperative retail banking landscape, the paper contemplates the bigger picture of retail banking in Europe, including its defining features, its societal and economic significance, and its response to prevailing regulatory frameworks. The goal is to ensure that the European economy and society can continue to harness the advantages offered by this sector in the future.
Cooperative banks’ recommendations to policymakers and regulators are:
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Understand and consider the strong positive contribution of both Europe’s universal retail and cooperative banks toward achieving the EU’s economic and social objectives. It should be ensured that the diversity they bring can be maintained.
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To enhance the effectiveness of European regulation, it is essential to adopt a more holistic approach. By considering the combined impact of individual proposals for the financial sector, regulations can better serve the interests of citizens, the economy and broader society.
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It is essential to consistently assess legislative proposals on their impact on the diversity of the banking landscape and the related effects for the financing of Europe’s regions and households.
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Instead of positioning retail banks as utility providers, it is crucial to enable them to build a sustainable business case.
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Impose comparable obligations on retail banks and other non-bank financial service providers. These obligations should cover aspects such as inclusion, cash access, paper-based services and branch availability. Alternatively, policymakers should ensure fair compensation, particularly for mandatory (semi-) public services.
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Improve the legislative process by focusing on principles rather than overly prescriptive rules, ensuring practical implementation timelines and assessing proposed legislation’ capacity to contribute to European competitiveness and potential overlap with existing regulations.
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