Jacek Jastrzebski the Chair of the Board of the Polish Financial Supervision Authority (KNF) took part in a panel discussion during the Eurofi Conference in Helsinki: „Adapting EU legislative processes to EU ambitions (single market, innovation)”.
Main points presented by Jacek Jastrzębski:
EU legislation has its advantages over national laws mainly in terms of safety of financial markets (stability and consumer protection), as it reduces the risk of unhealthy competition between Member States which may be tempted to come up with solutions that do not provide sufficient protection of client interests (regulatory arbitrage).
We should consider developing a separate EU regime for Fintech entities, but as an integral a part of a more general strategy for the digital transformation of the economy, encompassing also matters like cybersecurity, AI or big data. This regime could serve as a “toolbox”, assisting national lawmakers in their choice of a combination of tools which will be most adequate for the local market. The sandbox is just one of the tools that may be considered, amid other solutions, like innovation hubs.
EU initiatives should aim at developing a broad and comprehensive strategy for the digital transformation of the economy, with the FinTech regime being an integrated part thereof. What seems important, is the development of a “toolbox” – through their review and evaluation both legal and operational – that may be applied in fostering a safe and sustainable development of the FinTech industry. A sandbox should always be considered as one of the tools in the toolbox, but depending on the local market its choice and setup may be more or less obvious. What is essential is that the choice of the tool (or the combination of tools) for fostering FinTech should correspond to the characteristics of the local financial market (e.g. technological level of traditional banking business, appetite for financial innovation demonstrated by traditional industry players). Poland is an example for a market where the largest traditional banking players are at the cutting edge of innovation, and this obviously has its influence on the FinTech environment.
It is more crucial to have a common European FinTech “toolbox” – setting some general principles for the sandbox as one of the tools – rather than a pan-European sandbox.
The tools used for fostering innovation should be chosen with regard to the specific features of the local market – which again suggests that innovation-related arrangements should be left to national lawmakers. The line has to be drawn where issues of safety – particularly consumer protection – emerge, and then it may be time for the EU legislator to step in.
