On the 5 December 2017 GSMA Europe hosted a Mobile Meetings Series on “The role of Mobile in the FinTech Revolution”, participants discussed about how mobile technologies are supporting the FinTech revolution providing innovative, secure and accessible solutions to financial services and products.
In the last decade, finance has been undergoing a quiet but definite transformation. FinTech has emerged as a trend in the financial services sector impacting sub-sectors ranging from payments, wealth management, P2P lending to crowdfunding. Fintech has the potential to increase efficiency and reduce costs, improve access to, and delivery of, financial services, enhance the customer experience and create markets in new and innovative financial services products.
Mobile has played a ‘facilitator role’ over time: the mass-market penetration of smartphones has enabled internet access for millions of people across the world and has become the primary means by which people access the internet. Traditional financial institutions and new market entrants are developing their solutions with the support of smartphone capabilities.
Despite potential opportunities, important challenges need to be addressed in order to securely use FinTech solutions and build a fruitful collaboration between the mobile sector and the financial services sector. The major challenges identified by the participants were the lack of technology neutrality, barriers to open banking, need of scalability of FinTech solutions and to what extent FinTech fits in digitising the European Industry Strategy.
As mobile has become the dominant channel for internet access and usage, participants agreed on the key role that mobile plays while supporting digital banking, specifically with respect to secure login and authentication. During the discussion, participants identified three key assets provided by mobile operators: (1) a more secure access to online payment and disable mobile business process once stolen or lost; (2) convenient and easy solutions for the users – e.g. reducing passwords and codes to be dialled in – without harming their security; and (3) a global solution for authentication and the e-payment market. Nevertheless, there is a general agreement that more players should get involved in the discussion – a need that has been initially addressed by setting up the internal European Commission Task Force on Financial Technology.
With respect to standardization and the application programming interface (API), participants discussed API uptake in the Digital Single Market and shared alternative views whether a single European API is the solution. Furthermore, during the debate, e-Identification emerged as a key tool to ensure secure access to online financial services and tackle cybercrime. In this respect, several participants stressed that legislators and service providers should go beyond the traditional idea of identity being more granular on its scope and identifying additional features (e.g. age of majority).
FinTech is not evolving in the absence of legislation; however, the growing fragmentation of the legislative frameworks across the EU could harm the functioning of the internal market. The EU should not miss this chance and take the lead on the digital banking revolution; other major global economies are looking at the EU and how it intends to capitalize on FinTech. The Commission is currently working on a FinTech Action Plan (to be presented in March 2018 at the earliest), with some hope, it will effectively tackle the abovementioned challenges.
Hosted in our offices, the Mobile Meetings Series are small scale – but big scope – invitation only events for the Brussels public policy audience. Join us for a different take on the main issues affecting the mobile communications industry and its place in Europe’s information society.