The coronavirus emergency has highlighted the importance of innovations in digital financial products and services. The Commission believes that digital finance can contribute in a positive way to tackling the consequences of the crisis for businesses, economy and society.
Digitalisation of the financial sector is becoming prevalent and can be expected to accelerate following the Covid-19 pandemic.
In April, the Commission launched a consultation focused on three priorities to stimulate the development of digital finance in the EU:
Please see the link to the Accountancy Europe response to the EC consultation.
On 1 July, Germany took over the rotating presidency of the Council of the EU. Its strategic agenda focuses on sustainable economic and social recovery in overcoming the COVID-19 crisis. Digital transformation and climate change mitigation will remain key priorities for the German Presidency.
Digital sovereignty has been set as a leitmotiv with focus on security, skills, leveraging data, investment in digital capacities as well as supporting the Commission’s work on the digital finance strategy: “Europe must become better able to take action and shape events in the field of new technologies. Common European standards and norms must support the development of these technologies.” Read more
On 9 June, the Council adopted conclusions on shaping Europe’s digital future, addressing a wide range of issues related to the implementation of the EU digital strategy.
The topics covered include data policy and cloud, Artificial Intelligence, enabling technologies and digital value chains (supercomputing, quantum technologies and cloud computing), cybersecurity, 5G/6G and connectivity, environmental sustainability, Digital Services Act, electronic identification and trust services, public administrations, standards and blockchain, skills and education.
The Council conclusions also highlight the impact of the digital transformation on fighting the pandemic, and its critical role in the post-COVID-19 recovery. Read more
On 7 July, the EC launched a public consultation on the revision of the Directive on Security of Network and Information Systems (the NIS Directive).
In context of the rapidly evolving cyber-threat landscape, the Commission seeks stakeholders’ views to further improve cybersecurity preparedness.
The consultation is open for comment until 2 October 2020. Read more
On 24 June, the EC published an evaluation report on the General Data Protection Regulation (GDPR), two years after its entry into application. The assessment revealed that the GDPR has met most of its objectives and identified a number of areas of improvement.
Issues that will require further work relate to the fragmentation in the application of the regulation among Member States, inconsistencies between EDPB guidelines and national guidance, challenges arising with respect to the use of emerging technologies.
The report includes a list of actions to further support the GDPR application.
The next GDPR evaluation report will be published in 2024. Read more
On 16 July, the Court of Justice of the European Union (ECJ) will determine whether Standard Contractual Clauses (SCCs) are legitimate as a mechanism to transfer data under the GDPR.
This also raises a question about the level of protection of personal data transferred in accordance with the EU-US Privacy Shield.
Businesses rely on SCCs as a mechanism for transfers of personal data from the EU to the US. Read more
The EBA supported the EC’s initiative to present a new Digital Finance Strategy. It stressed the need for stronger coordination mechanisms to support authorities in supervising innovative cross-border, and cross-sectoral, business models. According to the EBA, as new business models emerge, new supervisory models may be needed to ensure operational resilience and consumer protection.
Comprehensive and ongoing monitoring of the application of innovative technologies in the financial sector as well as knowledge sharing will be instrumental to identify risks and opportunities to enable supervisory and regulatory authorities to take a timely action. Read more
ESMA welcomed technological innovation in the financial sector. It sees new forms of services and businesses such as automated advice or crowdfunding as a positive evolution as long as they are aimed at improving consumer financial experience and facilitate financial inclusion.
ESMA stressed that any EU policies aiming to ensure the financial sector takes advantage of cutting-edge technologies, while remaining sound and safe for investors, need to integrate the principles of technological neutrality, proportionality and market integrity.
ESMA focused on the following topics of specific relevance to them:
EIOPA indicated that it is important to strike a balance between the opportunities and risks arising from new technologies in order to enable the industry and consumers to reap the benefits arising from financial innovation.
EIOPA advocated for a common incident reporting framework at European level. Currently, insurers and supervisors are challenged in properly assessing and quantifying risks due to the lack of an adequate level and quality of data on cyber incidents at a European level. Read more
On 26 May, the Public Company Accounting Oversight Board (PCAOB) released a Spotlight document to provide information for auditors and audit committees about audits involving cryptoassets, such as Bitcoin and other digital currencies.
The document outlines considerations for addressing certain responsibilities under PCAOB standards for auditors of issuers who are transacting in or who hold cryptoassets.
The PCAOB also outlined questions that audit committee members could consider asking their auditors when transactions involving cryptoassets or holdings of cryptoassets are material to the issuer’s financial statements. Read more
On 25 June, the International Organisation of Securities Commissions (IOSCO) issued a consultation report The use of artificial intelligence and machine learning by market intermediaries and asset managers.
It proposes guidance to assist IOSCO members in creating appropriate regulatory frameworks to supervise market intermediaries and asset managers that use artificial intelligence (AI) and machine learning (ML).
The proposed guidance consists of six measures related to the standards of conduct expected of market intermediaries and asset managers using AI and ML.
The IOSCO deadline for comment on the consultation report is 26 October 2020. Read more
The advice provides practical insights how to be watchful for phishing and insider fraud in public sector.
The report looks at findings from recent surveys relating to both the supply and demand of professional services in Singapore. It puts forward practical solutions on how SMPs should seize the current opportunities to transform their practices, using business diversification and technology adoption as key guiding strategic objectives.
Accountancy Europe Members share with us your latest technology-related initiative by contacting Iryna.This curated content was brought to you by Iryna de Smedt, Accountancy Europe policy advisor since 2009. You can send her tips by email and connect with her on LinkedIn.