ERFF Update on EU Retail Financial Services
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ERFF: European Retail Financial Forum

RFS Spotlight September 2017

Monthly EU Retail Financial Services update

Since its launch in October 2015, ERFF has been working with representatives of business, consumers, and EU policymakers to create consensus on value-added ways to open up EU retail financial services (RFS) markets. ERFF’s RFS Spotlight brings you news on EU RFS policy, events, and creating benefits for customers and industry.

With summer gone, Brussels is busy again. But work was going on behind the scenes over the holiday months. So here's the latest on the EC’s Action Plan on consumer retail financial services.

Action Plan update

Running down the Action points from 1 to 12, this is where various initiatives stand at the moment.

On Actions 1 and 2 (fees for cross border payments and dynamic currency conversion) the public consultation is still open until 30th October, and the EC encourages all interested parties to respond. Studies on both issues are also getting underway.

On Action 3 (easier product switching), DG JUST will lead further studies that go beyond purely payment services (these are already covered in PSD2).

The EC will also soon be launching a study on Action 7 (facilitating access to cross border loans). The study will take into account the growing digitalisation in financial services and talk directly to consumer groups about their views. Besides looking at the barriers to cross border lending, we understand that the study will consider the fundamental question: is there real consumer demand? On the related Action 9 (standards and principles for creditworthiness assessments), the EC’s starting point will be to create guidance for creditors. See the write-up of ERFF Working Lunch on 12 September below for more on both these actions.

DG FISMA is consulting with the EC’s Free Movement of Capital Expert Group on the application of existing consumer protection rules for Action 8 (national consumer protection). It will consider issues such as ‘gold plating’ in different Member States. According to our sources, the study will look at savings accounts, consumer credit and annuities but not investment.

On Action 10 (FinTech and technology-driven single market for financial services), the results of the public consultation on FinTech were published on 13 September. See below for our briefing on this. Lastly, on Actions 11 (eIDAS) and 12 (distance selling), we hear that the Commission is planning to set up a new expert group to look at KYC requirements and eID, and DG JUST will lead a study on the online selling of financial services.


ERFF Working Lunch on credit and creditworthiness

ERFF kicked off the ‘back to work’ season with a Working Lunch on 12 September. The lunch was intended to help frame ERFF’s next technical workshop on these topics – see below ‘Coming up’. It was also an opportunity to discuss how ERFF might support the EC in its work on Actions 7 and 9 of the Action Plan (cross border loans & over-indebtedness and creditworthiness assessments).

Invited guests joined ERFF members and EU officials in an exchange on relevant issues and the wider progress of the Commission’s Action Plan. The Commission confirmed that it is about to launch a study to learn more about the business and consumer issues, business cases, and regulatory / supervisory barriers to cross border credit. This should produce results some time next summer. These will feed into the review of the Consumer Credit Directive planned for 2019.

On over-indebtedness, the Commission favours ensuring consumers receive advice early in the process of seeking credit. Outcomes could include promoting the exchange of best practices among Member States, and if necessary, some “light touch” regulation.

On creditworthiness assessments, we understand that the Commission would like to introduce common principles at EU level. These would provide sufficient guidance for creditors without being highly detailed. The Commission will also look at the availability of data on credit registers and what’s the minimum information that can be exchanged between them. There was also discussion on the impact of GDPR and further initiatives on the free flow of data. Both will make issues of which data can be used, and how, all the more important.

In general, it seems that the Commission favours assessing consumers’ “worthiness”, rather than focusing primarily on risk. Essentially, it aims to establish rules of access to assessments that will enable the exchange of data across Member States, so consumers have more choice and better products.  That’s to say, it wants creditors and borrowers alike to enjoy the benefits of greater competition.


Over the summer, officials at DG FISMA were busy analysing the 226 responses to the EC’s public consultation on FinTech.  The summary of contributions and the detailed summary of individual responses are now on line.  These show FinTech is widely seen as a major opportunity, with distributed ledger technology, big data analytics, artificial intelligence and cloud computing among the major themes. The Commission indicates that any or all these may be the subject of initiatives at EU level in future. Against the opportunities, respondents identified cybersecurity, control of data and money laundering as significant concerns.
Views on automated advice and crowd-funding were mixed; while on insurance, respondents saw potential for improved products, but risks for consumer exclusion. There were also concerns over cloud storage, but enthusiasm for distributed ledger technology and RegTech. Finally, several familiar topics in the FinTech debate featured in the responses: namely, the harmonisation of regulations, standards, interoperability and the role of European supervisors.

As we said in our EC Action Plan update, the public consultation on Actions 1 and 2 is still open until 30 October 2017. Views on both the costs of transactions and of currency conversions are welcome.

As technology extends into every aspect of our lives including financial services, cybersecurity is increasingly on the European policy agenda. In his State of the Union speech, on 13 September, Jean-Claude Juncker noted that this is a priority for the Commission and that it is proposing to establish a European Cybersecurity Agency.

Coming up…    

Workshop on eID and digital on-boarding, Wednesday 4 October 2017, Brussels – hosted by the European Commission, this full-day workshop will allow participants to hear preliminary results of a study mapping digital on-boarding practices across the EU, and to share experiences and feedback which will be used to enrich the final report. Register here, before 22 September 2017.

November / DecemberERFF is planning to hold a technical workshop on topics related to creditworthiness assessment standards and principles (Action 9, EC Action Plan on consumer retail financial services). We’ll confirm the date and full details in our next issue.

Other topics which may feature in upcoming ERFF workshops include cybersecurity and what a future true EU Single Market in retail financial services could look like.

About ERFF

The European Retail Financial Forum (ERFF) brings together around one table consumers, business and policymakers to support the opening up of retail financial markets in Europe. Representing all aspects of the retail sector – traditional, wider investment and digital – we are customer-focused, favour removing key barriers, and increasing choice and transparency for all in ways that keep Europe competitive.

For further information, please contact us at:

ERFF Secretariat

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