Payment Services Working Group
The expectations of a frictionless open banking pan-European area prompted by PSD2 were met only half-way. To summarize the outcome from the perspective of the fintech industry in one sentence, it would be that the industry in general focused on the compliance part rather than the opportunities brought by the PSD2. In light of the review process started by the European Commission earlier this year, members of the European Digital Finance Association in their position have outlined the main traction points on the way to accomplish a truly thriving fintech market. The group is currently focusing on the PSD2 review process and the Instant Payment Regulation proposal.
Open Finance Working Group
Access to data and data sharing is the prerequisite for innovation in the financial sector. PSD2 initiated the opening up of financial data. Yet the full potential of open finance is still untapped and also requires access to non-financial data. The European Commission plans to adopt an Open finance framework to propel the development of innovative financial services and support the creation of a common financial data space. In preparation for it established an Expert Group on Financial Data Space, which has recently published its report.
The group is collecting EDFA members’ feedback and inputs on the modalities of the European open finance framewo
CBDCs & Digital Euro Working Group
Next year will see the presentation of the digital euro project as the European Commission plans to publish the legislative proposal in the second quarter of 2023.
As an electronic equivalent to cash it would be an electronic means of payment that anyone could use in the euro area, complementing banknotes and coins. The underlying political objective is to strengthen the monetary sovereignty of the euro area and foster competition and efficiency in the European payment sector. Moreover, some central banks from the non-euro zone are also analyzing the advantages and disadvantages of introducing digital currencies. The group focus is on services based on central bank digital currencies.
Credit, Taxes and Financial Services Working Group
The group provides advice and expertise in relation to legislative proposals and policy initiatives in the field of credit, distance marketing, and tax-related issues.
More Policy Areas
Many-to-many and one-to-many solutions enabled by decentralized technologies open a new world of financial services and digital assets, as well as plenty of new regulatory questions. Programmable smart contracts automate the execution of services and obligations. Immutability of decentralized records enhances security and auditability, while consumers get the benefit of having direct control over their assets and personal data thanks to self-custody. EDFA believes that decentralized solutions can release new sources of financing and lead to changes in the real economy, which correlates with innovations in the way companies and private ventures are funded.
Digital Onboarding and Identification
Digital finance cannot function properly without the possibility for companies to acquire new customers, and consumers to access all services and products, online. Biometric and other means of remote and electronic identification are often more secure, yet there are still many regulatory hurdles that hinder their application across member states. This leads to uneven customer experience and discriminatory environment. We believe therefore that rules governing digital identification should be harmonized. Moreover, attention should also focus on self-sovereign identity schemes as they can protect personal data and strengthen the security of identification means.
Licenses and Sandbox Regimes
For a true Single Market for digital financial services to exist, rules governing the entrance to the market and supervision should be harmonized across member states. Today, national financial supervisors have different authorization processes and take different approaches to applying proportionality and flexibility when licensing new business models. Furthermore, authorization processes may take years to complete, while some innovative companies do not have any official guidelines on the licensing or cannot apply for one at all. This often undermines EU companies vis-a-vis their global competitors. EDFA advocates for a universal accessibility to sandbox environments across the EU and an equal supervision and market access for innovative solutions.