On 21 September 2017, the Joint Committee of the European Supervisory Authorities, published its September 2017 report on risks and vulnerabilities in the EU financial system, identifying Brexit and FinTech as two of the main risks to the EU financial system.
Brexit: The UK’s decision to withdraw from the EU and the uncertainties around the terms of the withdrawal are seen as one of the main risks. Should ongoing negotiations between the UK and the EU on the withdrawal terms remain inconclusive or end in a disorderly fashion, significant risks may arise. Such a situation would risk an abrupt impact on the legal framework for financial flows and services between the UK and the EU, with potential implications for market participants and consumers.
FinTech: The rapid growth of FinTech is increasingly affecting the financial sector, both raising new opportunities and challenges for financial institutions and users. The ESAs have identified data privacy issues, potential client discrimination, vulnerability to cybercrime and associated legal issues among key risks to consumers and financial institutions.