Despite retail financial services (e.g. bank accounts, credits, insurance) being part of our daily lives, and the extensive measures of harmonization taking place in recent years, research shows that retail financial markets are primarily national and that cross-border transactions are rare. The EU Commission believes that having access to financial services and products provided in another Member State would increase consumer choice and create better products. To this effect, it sees a major opportunity in the development of FinTech (the online provision of traditional and innovative financial services and products) on which it currently holds a public consultation (see our report here).
The Action Plan identified three main areas for further work:
- Increased consumer trust and empowered consumers for buying services both at home and in another Member State, supported by various measures, including reducing the fees for cross-border transactions and making the fees for currency conversion transparent, improve motor insurance products and facilitate the cross border provision of consumer credit.
- Reduced legal and regulatory obstacles for doing business abroad including working on common creditworthiness assessment criteria and facilitating the exchange of data between credit registers.
- Support the development of an innovative digital world the online provision of services being the key for developing the single market retail financial services and posing many challenges such as online customer identification and the regulation of the provision of innovative products,
The Action Plan builds on the Green Paper on retail financial services published in December 2015 with incorporating the results of the public consultation that has followed the Green Paper (see our post here and here),
The Action Plan puts forward a vision of a genuine technology enabled single market for retail financial services where no distinction is made between domestic and cross-border providers.