­Regulations are shifting, placing new demands on fintechs and regulators to create a thriving financial market that is both safe and innovative. Collaboration between regulators, fintechs, and other players in the financial services ecosystem is key for not only ensuring healthy markets but also regulatory compliance.
A part of fostering collaboration includes getting regulators, fintechs, and financial institutions at the table to discuss their viewpoints and regulatory difficulties. At the third edition of Fintech Meets Regulators event, hosted by the Netherlands’ central bank (DNB), this is exactly what happened. Representatives from the spectrum of financial services came together with not only the DNB, but with the Authority for Consumers & Markets (ACM), the Financial Markets Authority (AFM), and the Dutch Data Protection Authority (AP) to explore challenges in regulatory processes, particularly regarding PSD2 and open banking.
For instance, Frank Elderson, Executive Director of Supervision at DNB took the stage to share his views on what it takes for successful implementation of open banking, naming consumers, consent, compliance, and collaboration as critical factors. PSD2 doesn’t specify how to gain consent for sharing data, he noted, other than saying consent is required, bringing strong customer authentication and educating consumers on what they’re consenting to the fore. This focuses consumers and transparency on what data-sharing under the directive means. “It’s important we don’t see consent as a regulatory barrier,” said Elderson, backing the idea of using the consent discussion and a way to educate and empower consumers.
Elderson also mentioned that the advent of PSD2 adds to the concerns surrounding the strong rules regarding customer authentication and fraud monitoring, devised by the European Bank Account Authority. He noted that the DNB wants to work with fintechs to help them comply with these standards, citing collaboration as an efficient mechanism to bring about compliance.
And as the regulatory landscape is rapidly changing, fintechs themselves are looking to smart, technology-driven solutions to assist in compliance. Tech like AI and data analytics are coming along, means with the potential to shift compliance from a burden to a competitive advantage, which will be the topic of a follow-up event, The Rise of Regtech on 11 December. This gathering also features regulators from the DNB alongside academics, experts from KPMG, PwC, Google, Accenture, and BISS Institute, and start-ups in the regtech space. Registration for this event can be completed here.