Good morning to everyone joining this great event. I'm delighted to be with you.
We hear, read and experience the rapid changes taking place in the financial system.
There are so many new products, new players, new ways of thinking and or doing finance are opening up a myriad of opportunities for businesses and citizens.
Today, the event is about those making this change happen:
We're talking here about creative minds that are bringing new digital financial products and services to the market and those tasked with supervising these activities.
The European Commission is determined to support you.
Embracing responsible innovation is at the heart of our Digital Finance Strategy.
The new EU Digital Finance Platform, that we are officially launching today will play a part in continuing our work on digital innovation.
Already, the European Union has a vibrant, growing community of innovative financial firms.
And our regulators have made good progress putting in place new rules that provide the clarity needed for innovation to flourish.
National supervisors have made big efforts to improve what they offer to the companies they work with.
But I think we all know that we have to go further, and that is what I would like to talk to you about today.
[What we have done to tackle fragmentation]
I always say that one of the biggest achievements of the EU is its Single Market.
Over the past few decades, it has given an extraordinary boost to economic growth, development and entrepreneurship.
But of course, especially when it comes to services, the Single Market is still far from complete.
And I think digital financial services are a case in point.
The “classic” core activities in the financial system are covered by passporting. This is something we all know and understand.
Any firm authorised in an EU or European Economic Area country on the basis of common rules can offer financial services or products across the single market.
But not all innovative new services and applications fit neatly into this system, and passporting doesn't cover all areas of our rules.
So this can make it too difficult for firms, particularly smaller ones, to scale up their activities across the EU.
Today: for too many innovative financial companies, the Single Market is not fully accessible.
Customers – both businesses and consumers – are missing out on a much bigger, more effective offering.
And on a broader level, this fragmentation puts a brake on innovation in the European Union.
The Commission wants to work with all stakeholders, using the levers we have – both big and small – to help create a true Single Market for digital financial services.
In some areas, we've been doing this through legislation.
Take the framework for crypto assets that the Commission has proposed.
It will set clear rules for previously unregulated crypto assets, including so-called stablecoins.
And this will create legal certainty for innovators, allowing them to scale up their activities across the EU.
At the same time, the new rules will help us protect investors and consumers, while preserving market integrity and financial stability.
Well, the good news is that Member States and the European Parliament are now set to enter final negotiations for an agreement.
Given how fast the market for crypto assets is growing and how many retail investors it attracts, we really have no time to lose.
Another example is our DLT pilot. It will soon enable market players to safely experiment with issuing, trading and settling shares and bonds using blockchain technology.
This kind of learning-by-doing approach is quite new for the European Union – a sign that we too are innovating.
It might lead to more far-reaching changes to our legislation, depending on the lessons we learn from the pilot.
But I think we all know that legislation alone will not do the trick.
Innovative financial firms need more support to tackle the challenges they face on a day-to-day basis.
In those areas where an EU framework is lacking, diverging national requirements and supervisory practices can make it very difficult for firms to offer their applications across Member States.
Simply finding out which authority to turn to - let alone the different national rules and possibilities for innovation - can be difficult, time-consuming and costly.
National supervisors have stepped up to respond to this challenge.
They now offer specific contact points for fintech firms and innovation hubs, providing really practical information.
A number of countries have set up regulatory sandboxes to allow testing of new products and applications and to ease entry into the market.
This is really very welcome. But efforts at the national level just don't go far enough.
To support innovation in finance more effectively, we need close cooperation and convergence among national supervisors.
And here too good progress is being made - national authorities are already working on this.
Coordinated by the three European Supervisory Authorities, they have come together in the European Forum for Innovation Facilitators.
And here they exchange views, share experiences and build closer relationships.
This is really essential if supervisory approaches and practices across the EU are to become more closely aligned and more predictable for market participants.
This initiative has already yielded results: working together and with the European Supervisory Authorities, national supervisors have come up with a framework for cross-border testing.
It's thanks to this initiative, firms seeking to expand their activities to additional markets will be able to involve multiple national authorities when launching the testing process.
This framework is a big step forward.
Even though taking part in cross-border testing is optional for national authorities and they of course still apply the respective national rules, this framework represents a big step forward.
I really want to commend all those of you who have worked hard to put this in place.
[How will the EU Digital Finance Platform support innovation?]
Now of course the framework needs to be applied in practice, and that is where the EU Digital Finance Platform comes in.
This Platform is one of the key outcomes of the EU Digital Finance Strategy.
Unlike many of the other initiatives I mentioned – and unlike many other topics I get to talk about – it is actually a very concrete, tangible project.
It also a bit of a departure for the Commission, it is different from our standard websites.
And that is mainly because it is designed to encourage interaction.
One of its two main building blocks, the Digital Finance Observatory, offers opportunities for registered users to share content, for instance about events or research publications linked to digital finance.
Innovative digital firms will literally be able to put themselves on the map – the European Fintech Map – a key feature designed to showcase the fintech community and hopefully spark new discoveries and connections.
The second main building block of the Platform is a gateway to national supervisors.
I have already mentioned the fragmentation we still see in Europe and also the practical difficulties market participants continue to face.
This part of the Platform aims to help overcome these by creating a single access point: providing information about national supervisors and their offerings, as well as national licensing requirements.
This part will also include information about the work of the European Forum for Innovation Facilitators.
And, really importantly, it will host a range of features linked to cross-border testing.
Firms will be able to fill in and upload a standard form to notify supervisors they want to be involved in the process.
And a cooperation tool will give authorities working on the same case the option to exchange views and documents through the Platform if they choose to do so.
In this way I believe that this website can offer very practical support to scaling up digital financial services right across Europe.
Of course, how successful cross-border testing will turn out to be ultimately depends on how firms and supervisors use it.
I can only invite you all to make the most of this opportunity.
Maybe, as we all know, I must stress markets do not wait, innovation does not wait, and the rest of the world certainly will not wait for Europe.
This is about being ahead and working together.
We have great creativity and entrepreneurial spirit here, as well as committed and competent supervisory authorities – all the elements that it takes to make this a success.
In fact, the EU Digital Finance Platform as a whole will be what its users make it.
Those of you who are listening, I really ask you to use it to the full.
We have put the elements in place that will enable fintechs and authorities, but also others interested in digital finance, like established financial firms, academics, NGOs and citizens, to start building stronger relationships.
If you like, to build a community.
In this way, the Platform can play a role in bringing market participants and supervisors closer together.
I think we should not underestimate the power of these “softer” initiatives. Dialogue and closer links can - and will - translate into tangible results.
[What are further initiatives for the future?]
But it's right to acknowledge that these benefits will probably take time, and the Commission will continue to support this process.
For example, we are already working on the second phase of the Platform, preparing to improve existing functionalities and indeed, to add new ones.
One idea we are discussing with national supervisors and other market participants is that of a Data Hub.
As you all know, increasingly, data is what makes finance tick, and you are probably aware of the many initiatives the Commission is pushing to ensure that we make the most of this resource.
Reflections are ongoing about this idea, but the Data Hub could be a space where firms get access to data enabling them to test innovative products and applications.
Maybe we could envisage initiatives inviting them to work with each other, supervisors and experts, to create synthetic data for specific use cases where data is actually hard to come by.
Anything we will offer here would naturally need to bring clear added value, and complement national initiatives as well as cross-border testing.
To boost connections even more, a cross-border mentoring and coaching scheme could bring financial firms together to get advice from each other or indeed from experts or other stakeholders.
Networking is a central idea behind the Platform, and I think there is even more we can do to expand it and I hope the conversations today will give us those ideas.
As we develop the Platform, we will of course also take into account the views of those who will hopefully be very active in using the website. Feedback is really important.
We will continue to work closely with the European Supervisory Authorities. We appreciate your input and support.
And we will listen with great interest to Verena Ross, Chair of ESMA, who will later outline how she sees the project – and how it links to the work of the European Forum for Innovation Facilitators.
Again, the Commission is committed to continue to support this group.
As our financial system changes and increasingly involves new products and players, it will be important for supervisors to broaden their outlook.
This should include working more closely with other kinds of supervisory authorities, like those responsible for data protection.
A final point I would like to make in this context is the issue of knowledge and skills.
Staying on top of the technological developments and assessing the impact of new technologies, business models and products on risk and market integrity is a tall order.
It is something all of us – regulators and supervisors – really need to work on.
Business as usual is really not an option.
Finance is changing dramatically, and regulators and supervisors must make sure they have the knowledge and capacity to be proactive.
I worry that if we fail to do that, we risk falling behind – rather than being ahead of the curve.
The other is to ensure that we effectively support the kind of innovation we want to see in Europe. I should add, spotting risks early enough to act is one important objective. When it comes to the kind of innovation that supports our economy and helps us build a resilient, more cohesive society.
This means we all need the skills it takes to create an environment where this kind of innovation can flourish.
Also to be mindful that we have to work with speed. Change is happening and it's happening very quickly.
To support supervisors in this challenging environment, the Commission – working closely with the European Supervisory Authorities – is setting up an academy that will offer training on all aspects of digital finance.
This is a very important project that complements our Digital Finance Strategy. It's great to see so much interest from across Member States.
[Conclusion]
To conclude, we have put a lot of effort into creating this Platform. We want to lot further to go to make sure we reap the full benefits of innovation in finance in the EU.
We will only succeed in this if we all work together.
Naturally, our perspectives are different, and we may not always agree on the best way forward.
But it is essential that we keep talking and listening to each other and get to know each other better.
The EU Digital Finance Platform is here to support dialogue and cooperation. I really would call on all of you to make the most of this Digital Platform for Finance and we look forward to hearing your feedback.
Thank you.
