EU Parliament paves the way for new approach to Fintech – Hayes
Hands-on regulatory approach towards fintech needed in Ireland
Brian Hayes MEP today welcomed the adoption of a European Parliament resolution on Fintech (financial technology), the first report on the subject from any EU institution. Mr. Hayes was the lead negotiator for the EPP on the report.
“Today’s adoption by the European Parliament of the Fintech resolution represents an important step for the EU in getting to grips with the rapidly merging areas of finance and technology.
“The report offers clear recommendations to the Commission to put Europe on a path towards a system, which facilitates the use of the latest technology in financial services but also priorities financial stability.
“There is an urgency for Europe now to compete with other parts of the world on fintech. The US, China and Israel host more than half of the Top-10 largest FinTech companies. If Europe wants to remain competitive, rapid innovation should now be the norm.
“In Ireland, we need to embrace new financial technology (FinTech). We’ve done reasonably well so far but we’re still very far off reaching the full potential that this new digital finance world can offer. Look at the UK, look at Netherlands – they’ve created an innovative space where new financial technology solutions can flourish. They have done this through so-called ‘regulatory sandboxes’ which allow firms to test products before they go to market.
“I believe it’s time that the Central Bank, in collaboration with the Department of Finance, developed a regulatory sandbox for Irish financial firms to test new and innovative products. The great thing about a sandbox is that small businesses who are unauthorised can test their ideas before they go through the long authorisation process. The Parliament’s resolution explicitly calls for national regulators to develop controlled experimentation spaces to encourage new products.
“Last week China’s central bank established a fintech committee to study the impact of financial technology on financial markets. This sort of hands on approach is needed from the Central Bank of Ireland in order to face up to the reality of the opportunities and challenges that fintech offers.
“The EU is in the midst of its most radical plans for completing a Digital Single Market. Being part of this single market is so crucial for small fintech firms and we need to harness the benefits that this offers. A lot of work still needs to be done at EU level to catch up to the global fintech revolution. However, the Central Bank and Department of Finance should not wait for the EU to set the agenda, we have to be proactive if we want to make Ireland a real hub for EU fintech firms.”