EBA releases speech on FinTech and the future of monetary intermediation

On 4 July 2023, the European Banking Authority ( EBA) released a speech by Jose Manuel Campa, Chairperson of the EBA, at the Reserve Bank of Cyprus, where he went over FinTech and the future of monetary intermediation.

In his speech, Mr Manuel Campa made the following remarks:

  • The EBA’s routine development tracking work reveals that, to date, the introduction of truly unique kinds of product or services has actually been rather restricted, albeit the EBA definitely anticipate an uptick in cryptoasset issuance and service arrangement, following the entry into force of the marketplaces in Crypto-assets Guideline ( MiCA).
  • In order to utilize the chances that FinTech provides properly, market, managers and regulators require to be proactive in determining, keeping track of and alleviating threats that are frequently multi-faceted and inter-related.
  • Making use of digital channels to market and supply access to monetary product or services might posture threats to customer security in case of inefficient disclosures of item functions.
  • Dangers might likewise emerge in the context of product or services bundling, leading to the sale of inappropriate or unduly pricey product or services to customers.
  • Functional threat can be raised through increased reliances on innovations, consisting of those offered by 3rd parties.
  • The EBA anticipates banks who are increasing their dependence on ingenious innovations to execute a commensurate ‘skilling up’ on innovation, threats, and threat mitigation strategies at the level of the management body and throughout organizations. The EBA likewise anticipates banks to have actually in location upgraded and robust threat management structures.
  • The EBA is acting to guarantee that cash laundering and terrorist funding ( ML/TF) threats are dealt with holistically throughout the cryptoasset sector. Significantly, this indicates that the EBA will modify its existing anti-money laundering and counter terrorist funding standards, consisting of the fund transfers standards and the ML/TF threat aspect standards.

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