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Banking 29 Jun 2017

Proposals to promote innovation in the FinTech sector in Europe

The European Commission (EC) plans to begin to define policies and measures to drive innovation in the financial services area and prepare for the ultimate launch of new FinTech services throughout the European Union. For this purpose, it conducted a public consultation in which BBVA participated, laying out its vision and making proposals for a framework that will allow all players to compete fairly.

EU flags in front of Parliament BBVA resource

The goal of the dialogue inaugurated by the EC is to create an inclusive FinTech sector that accepts all service providers, regardless of their type and size. The solution is for everyone to create a common framework that will ensure market transparency while preserving the financial stability and security of consumers, businesses, and investors.

BBVA believes that this initiative will be essential to improving the quality and diversity of banking solutions, and to perfecting the European single market. The following are some of the proposals BBVA has made to the EC:

Open dialogue

BBVA’s response to the public consultation proposes an open dialogue among all stakeholders in the financial sectors transformation so that they can unite to create the policies of the future.

For this purpose, BBVA considers it essential to promote cooperation between the public and private sectors by creating innovation hubs, accelerators, innovation academies, and regulatory sandboxes (controlled test environments in which regulations can be temporarily modified). BBVA believes that all such initiatives should be voluntary and open to all innovative companies, but should not supplant projects led by private companies in which regulators may also play a role.

One of the most important points in BBVA’s response is support for creation of European-wide regulatory sandboxes to prevent national divergences and promote cross-border projects. BBVA therefore proposes that the European Supervisory Authorities (ESAs) specify guidelines and coordinate local initiatives with the National Competent Authorities, and that the ECB run a special regulatory sandbox for cross-border banking projects.

To make this dialogue truly fluid and efficient, BBVA recommends including the various national financial- and digital-related authorities. These efforts could be coordinated by a European authority, but the input of supranational and local institutions should always be considered.


BBVA also believes that authorities should strengthen their supervisory role by more proactively determining whether unlicensed service providers or service providers with limited licenses actually meet the legal requirements for the services they provide.

BBVA maintains that this will ensure that consumers have access to secure financial services and avoid misuses that might damage the image and reputation of the entire FinTech sector.

A level legal playing field

BBVA considers it essential that the sector not be over-regulated since every new legal measure presupposes great effort and costs for the industry. Regulatory measures should always aim at ensuring a level playing field for all players, and at reducing asymmetries between them.

BBVA therefore maintains that FinTech licenses should allow operations in all EU countries, in particular in specific areas such as crowdlending, financial services marketplaces (digital platforms), or virtual asset management. BBVA also proposes that banks be able to offer all these services under their current licenses.


BBVA believes that, since the barriers between competition and collaboration are becoming increasingly blurred, a good understanding of the financial ecosystem and its interrelationships is essential to the promotion of innovation.

BBVA’s principal proposal in this area is that regulations not be linked to the size of firms but rather to their individual risks and activity types. BBVA recommends that, in addition to promoting competition, regulations also focus on consumer protection and system stability.


BBVA believes that regulation should be technology-agnostic and promote exploration and testing of emerging technologies, and that, in this area, regulators should promote the use of industry-led global standards and interoperability.

These are some of the proposals BBVA presented during the EC public consultation, in which financial entities, regulators, start-ups, consulting firms, think tanks, academic institutions, and consumer organisations also participated. The EC will publish a summary of the responses it received later this year, and will also develop an action plan to accelerate the creation of new and better financial services.