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European Commission - Speech - [Check Against Delivery]

Vice-President Dombrovskis on the Action Plan on Consumer Financial Services

Brussels, 23 March 2017

First, I would like to say that my thoughts go out to all those affected by the appalling attack at Westminster in London. An attack at the heart of UK democracy will not destroy our values, tothe contrary – it will strengthen our resolve to protect them. My condolences to the families and beloved ones of the victims.

Now to the Action Plan on Consumer Financial Services: today, the Commission has adopted an Action Plan that puts European consumers at the heart of our work on financial services.

We all use financial products such as insurance, pensions, loans, and current or savings accounts. And yet, we don't have a real Single Market for consumer financial products. Let me give you just one example: only 7% of Europeans have purchased a financial product or service, such as credit card or car insurance, in another EU country.

We think that consumers should have access to the best products available across the EU, not just within their own country. They should be able to easily shop around, to have greater choice and to get the best prices. And firms shouldn't be held back from offering their products abroad because of national barriers. This clearly isn't the case today.

This Action plan is part of our strategy to accelerate a Capital Markets Union as we are working to make our consumer financial services markets more integrated.

We propose three main strands of work until 2019 to make this happen.

First, we want to increase consumer trust and empower consumers when buying services at home or from other Member States.

Here, for example, we want to reduce fees that one has to pay when making cross-border transactions involving non-Euro currencies. Today, you might have to pay very high fees if you want to transfer money from Poland to your family or friends in Spain, or from Denmark to Croatia, to give some random examples. We want to change that.

Later this year we will propose to extend the current EU Regulation on cross-border payments to all currencies in the EU.

That means that all citizens will benefit from lower charges when paying by card, transferring money or withdrawing cash within the EU.

We also will assess how to make currency conversion rates much more transparent. This matters, for example, for consumers travelling outside the euro-area and who pay with their cards. Increasingly, consumers are offered a choice to pay in domestic currency or in euros. Those consumers choosing to pay by card in euros are most likely to get less favourable currency exchange rate than when making the same payment in domestic currency. But many consumers are not aware of this, as there is not enough transparency regarding exchange rates. We will start by collecting evidence.

We also want to make it easier for drivers to take their ''previous driving record'' – [claims history statement] to a new insurer when they move abroad. This will allow for an objective assessment of a person's driving record and should consequently be reflected in the price of the insurance. This means that someone with a good driving record will be able get the no-claims bonus also abroad, which is not the case today.

Finally, we want to consumers to be able to see at a glance how much they will have to pay to rent a car, either in their own country or abroad. We want to make sure pricing is transparent, in the same way asit is for plane tickets.

Our second work stream is to tackle the regulatory and other obstacles that prevent firms from doing business across borders.

We will review national consumer protection and conduct rules to understand if they create unjustified barriers to cross-border business. This is a key criticism from the industry.

We will propose standardsto enable the exchange of credit data across borders to ensure that a consumer's creditworthiness can also be assessed from abroad. This will help banks and other credit institutions to offer their products – such as loans - in other Member States.

Finally, we want to harness the potential of digital technologies to drive positive change in consumer financial services.

Here we will promote widespread use of electronic IDs and signatures in the banking sector across Europe. The idea is to make it much easier for customers to choose any bank of their liking, in any EU country, without physically going into a branch. This has a potential to make banking sector more attractive as banks will be competing for consumersin a true Single Market.

Today we have launched a public consultation on FinTech. We want to gather the views of all interested parties - individuals, consumer groups, traditional industry, FinTech companies, regulators and supervisors – on how we can best develop an EU-wide approach towards technological innovation in financial services.

We want to see the European FinTech sector that can innovate and operate freely across EU and compete globally, while guaranteeing consumer safety and privacy.

This means that in defining Europe's approach to FinTech we will need to strike the right balance between focussing on risk and supporting Fintech solutions that will enable our businesses to become more efficient and more competitive.

To conclude, today markets for consumer financial services are largely domestic, not European. Our Action Plan for Consumer Financial Services aims to change this – for the good of both consumers and of companies.

Thank you very much.


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