Stakeholder consultation addresses how fintech should be regulated in Ireland- Hayes
Brian Hayes MEP today (Friday) held a stakeholder conference in Dublin, with industry experts involved in the Fintech sector, to discuss how new Fintech services and products should be regulated into the future. The event was held in the European Parliament information office in Dublin from 09.00-11.00 and included industry representatives from banking, insurance, start-ups, asset management and accountancy.
Mr. Hayes said: “We are all well aware of the major impact that Fintech is having on the financial sector and the way that we deal with money. In May the European Parliament was the first EU institution to set out a clear position on how Fintech should be regulated into the future in the EU. The European Commission is currently conducting a public consultation on Fintech with a view to defining an EU strategy on Fintech.
“Today’s stakeholder consultation was a discussion forum for how Ireland should develop a fintech ecosystem which both allows for innovation in financial services as well as maintaining the high level of financial stability that has been put in place since the crisis.
“We are living in the midst of the disruption age. Technology today makes such a difference in winning new markets and growing your business. It is the defining mark of business success or failure in today’s globalised world. This trend will multiply over the next decade, as it has in the last.
“In Ireland, we need to embrace Fintech. We’ve done reasonably well so far but we’re still very far off reaching the full potential that this new digital finance world can offer. Look at the UK, look at Netherlands – they’ve created an innovative space where new financial technology solutions can flourish. The main reason for this is through the creation of ‘regulatory sandboxes’. A regulatory sandbox is a controlled environment set up by a regulator or central bank that allows businesses to test innovative products, services or business models in a live setting.
“It is time that the Central Bank, in collaboration with the Department of Finance, developed a regulatory sandbox for Irish financial firms to test new and innovative products before they go to market. The great thing about a sandbox is that small businesses who are unauthorised can test their ideas before they go through the long authorisation process. The creation of a sandbox in Ireland would give us the confidence to take a giant leap into the FinTech world. We have a fantastic start-up culture, particularly in Dublin, that would welcome this with open arms.
“But in all of this it is important that people are not left behind. Assumptions about the level of personal tech competence or knowledge, cannot be taken for granted. And of course assumptions about the level of national or regional connectivity, also need to be understood. Pretending that people should use online services without proper broadband is another dangerous assumption.
“Equally the financial sector cannot underestimate the degree of trust that was sundered as a consequence of the financial crisis in Europe and especially in Ireland. Europe has helped Ireland in restoring financial stability both in our public finances and in our banks. That stability cannot be put at risk. As financial services move at warp speed into the digital age, with new technology and an enhanced product and service offering, underlying all of this must be financial stability. Trust in banking and trust in financial services must be earned.
“The EU is in the midst of its most radical plans for completing a Digital Single Market. Being part of this single market is so crucial for small fintech firms and we need to harness the benefits that this offers. A lot of work still needs to be done at EU level to catch up to the global fintech revolution. However, the Central Bank and Department of Finance should not wait for the EU to set the agenda, we have to be proactive if we want to make Ireland a real hub for EU fintech firms.”