EBA reports on potential barriers to cross-border banking and payment services

The EBA has published a report identifying potential impediments to the cross-border provision of banking and payment services in the EU.  The report was developed under the EBA’s FinTech Roadmap, and calls on the European Commission to take action to tackle these barriers and facilitate the scaling up of cross-border activity.

The report notes that whilst digital solutions increase choice by allowing consumers to access a wider population of financial services providers, the full potential of these solutions has not been realised in the EU, partly due to differences in regulatory requirements and supervisory practices across Member States.  The EBA has identified two main challenges to overcome:

  1. The first is identifying when a digital activity is to be regarded as a cross-border provision of services.  The report notes that whilst this is a vital element in determining which regulatory and supervisory frameworks apply, competent authorities and firms currently lack clear guidance on how to classify cross-border activity under the freedom to provide services or right of establishment.
  2. The second stems from areas of EU law that are not fully harmonised or are not yet covered by EU law.  In particular, the EBA has identified issues relating to authorisations and licencing, consumer protection, conduct of business requirements and AML/CFT.

The EBA considers the resolution of these issues to be crucial in tackling barriers to market entry, supporting the scaling up of financial services in the EU and improving the competitiveness of the EU Single Market.  The EBA warns that if these issues are left unaddressed, they may prevent institutions from providing cross-border banking and payments services in the EU.


Roseyna Jahangir