'Fintech meets the regulators: PSD2 and the Road to Open Banking' on 30 November at DNB
Mutual cooperation and understanding between innovators, whether start-ups or incumbent financial institutions, is key to fostering a safe and mature financial sector. Come join us together with the Dutch Central Bank (DNB), the Financial Markets Authority (AFM), the Authority for Consumers & Markets (ACM), the Dutch Data Protection Authority (AP) in our Fintech Meets the Regulators event that will bring together the spectrum of innovators in financial services to discuss regulatory challenges, explore opportunities, and create a better mutual understanding between regulators and actors in the financial space". Register here.
InnovationHub one year - Thanks for all your questions!
Just over a year ago, the AFM and DNB jointly set up the InnovationHub. Time, therefore, to take stock.
But first of all, why was it again we started it in the first place? FinTech, RegTech, InsurTech... there is plenty of innovation in the financial sector, in many fields. We applaud such developments. Innovation generates more diversity in the sector, which is good for the consumer as well of course. However, innovation doesn't always neatly fit into existing rules and regulations. So what do you do as a supervisory authority in such cases? And what if you are a market operator? Say you have a company wanting to offer a new innovative financial service, but it is unclear how this service should actually be defined. Which license do you need then? And should you go to DNB or the AFM? Which supervisor deals with this service? Since last year, it has been possible to ask such questions at the Hub.
And market operators have done so in great numbers. Since the start, on 9 June 2016, we received no less than 216 questions, from many different sectors. Banks, insurers, and in particular payment institutions know where to find us. But also entrepreneurs with entirely new initiatives find their way to the InnovationHub and ask us to think along right from the drawing board of the service they are planning to launch. Though most of the questions now originate from payment service providers, there is also some innovation in the more traditional sectors. It is mostly start-ups and smaller enterprises that find their way to the Hub. Larger financial institutions on the whole use the contacts they already have with the supervisory authorities and apparently feel less of a need to consult the InnovationHub. But for sure, the Hub is also there for established parties. And they can ask questions outside the regular supervisory relations.
Naturally, we hope that all parties that asked us questions are satisfied with the answers received. We will soon hold a survey to learn about your experiences. As InnovationHub, we want to keep developing ourselves and meet your need for information.
But besides giving market operators the information they need, I would like to stress here that we have also learned a lot ourselves.
In my view, the strength of the InnovationHub is that it works both ways. On the one hand we help institutions find their way in the world of rules and regulations, on the other, institutions help us gain better insight into the latest developments in the sector. The questions we receive allow us to anticipate what is coming. To give you an example: We notice there is quite a bit of uncertainty about the European rules and regulations in the wake of PSD2. Questions from the market give us a good idea of the challenges parties encounter. They allow us to get you the right information quickly, even before the actual rules and regulations come into effect.
Another thing that one year of InnovationHub has taught us is that innovations in the market force us to act not just according to the law, but also in the spirit of the law. The Hub shows us which rules and regulations cause unnecessary impediments. We have to keep asking ourselves the question: "What was the original purpose of these rules?" Do they still fit the bill? And if not, what do we do about it? Is there room for a customised approach in applying specific rules? Or what can we do to make sure the rules are being amended?
216 questions and answers have hopefully contributed to the smooth introduction of innovations in the financial sector and will continue to do so in the future. The questions definitely made our supervision more committed and alert. So, many thanks for all your questions!
InnovationHub website updated: FAQs and cooperation with the ACM
The AFM and DNB have updated their InnovationHub website. FAQs have been added and the Authority for Consumers and Markets (ACM) has also joined the initiative. The InnovationHub received over 200 questions in the past year. A "Frequently Asked Questions" section has been added to the website. These questions concern procedural matters, e.g. response times, and questions on specific subjects, e.g. investments in cryptocurrencies. The second new feature is the fact that businesses can now also turn to the InnovationHub with questions and observations about competition rules, thanks to cooperation with the ACM.
The AFM and DNB present ‘More room for innovation in the financial sector’
The Netherlands Authority for the Financial Markets (AFM) and De Nederlandsche Bank (DNB) are facilitating market access for innovative financial services with ‘More room for innovation’. In view of the rapid financial-technological developments, they will from now on use a more provider-oriented approach in accommodating market access for innovative services, using the scope of the law to help providers comply with rules and regulations. They will also assess whether existing policies need to be reviewed as a result of these developments.
The AFM and DNB published a joint document describing the new approach, ‘More room for innovation in the financial sector: Policy proposals for market access, authorisations and supervision’. The document was also enclosed as an annex to Minister of Finance Jeroen Dijsselbloem's letter to the Dutch Lower House.
InnovationHub update: December 2016
In the InnovationHub's first six months, which covered the period of 9 June to 9 December 2016, market operators submitted 114 requests for information about innovative initiatives in the financial sector. More than 75% of these requests related to market access and authorisation policies, predominantly focusing on payment system innovations (also in view of the revised Payment Services Directive PSD2) and blockchain technology.
Nine questions on the InnovationHub
Over the past few months, the AFM and DNB received many questions about the InnovationHub. We have listed the most frequently asked questions here:
Responses to AFM-DNB discussion document: More room for innovation
In response to the AFM and DNB's request, stakeholders submitted their comments on the ‘More room for innovation’ discussion document. A broad range of institutions, from established parties to start-ups, took the opportunity to have their say and contributed their views.
The AFM and DNB greatly appreciate this and wish to thank all respondents for their constructive contributions. The responses show that parties favour the AFM and DNB's proposals to facilitate innovation in the financial sector. However, several organisations have also highlighted issues that should be taken into account when implementing the proposed policy options.
Using the responses received, the AFM and DNB will now draft the details of the policy options. Further steps will be taken in the autumn of 2017.
Joining forces with ACM: Focus on competition
DNB and the AFM are teaming up with other supervisory authorities to offer the financial sector more room to innovate. The arrival of new, innovative parties ensures greater competition and diversity in the sector, which benefits consumers. One of the other supervisory authorities in this area is the Authority for Consumers & Markets (ACM). ACM aims to increase the chances of success of FinTech, so that it will have a lasting and positive impact on competition in the financial sector.
To do so, it has asked market operators to provide input about the role which ACM should play in this respect.
AFM-DNB discussion document: More room for innovation
FinTech developments are calling for a new perspective on supervision Together, the AFM and DNB aim to create more room for innovation in the financial sector and are exploring the options for market access, authorisations and supervision. We call on market operators and other stakeholders to let us know their views about the changes that are needed.
Respond to or our discussion document and tell us which changes you believe are needed. Your input will contribute towards developing effective policies and will help the AFM and DNB to align their policies with those of fellow supervisors and regulators in the Netherlands and abroad.
DNB research report: The impact of FinTech
Technological innovation is seen as one of the primary forces that will influence the financial sector in the years ahead. DNB has studied the impact of technological innovation on the financial sector and its implications for supervision.
AFM and DNB position papers: Innovation presents opportunities for and risks to the sector
In January 2016, the Standing Committee for Finance of the Lower House of Dutch Parliament hosted a round-table session on technological innovation in the Dutch financial sector.
Olaf Sleijpen, Director of DNB's Supervision Policy Division, and Reinier Pollmann, the AFM's Innovation & FinTech Manager, attended the meeting.
Panel members were asked beforehand to set out their views on FinTech briefly in a position paper.