Consumer financial services — green paper

SUMMARY OF:

European Commission Green Paper (COM/2015/0630 final) — Better products, more choice and greater opportunities for consumers and businesses

SUMMARY

WHAT DOES THIS GREEN PAPER DO?

• It initiates a wide consultation on the next steps toward creating a more integrated EU market for retail financial services* for both consumers and businesses.
• The ultimate objective is to offer EU consumers better products, more choice and greater opportunities — and to make it easier for financial firms to do business across Europe, including by digital means.

KEY POINTS

The EU has adopted several existing legislative measures in retail financial services, such as the Mortgage Credit Directive and the Payment Accounts Directive. Nevertheless, this European Commission consultation seeks to identify remaining barriers that stand in the way of a more integrated and competitive single market for retail financial services — barriers which still prevent consumers and providers from purchasing or offering the best services available in the EU.

The paper highlights some of the existing problems in the retail financial services market, such as:

• insufficient competition;
• limited consumer switching to new products or providers.

It addresses the impact of digitalisation and innovation such as online banking, new business models and digital technologies. These present opportunities for both providers and consumers but can also pose regulatory and consumer protection challenges.

Some specific issues and potential solutions are highlighted. For consumers, these include:

• tackling high fees;
• increasing portability of products, such as private health insurance, when EU citizens move from one EU country to another; and
• building trust and confidence in consumers to shop across borders and improving redress (remedy or compensation in the event of a complaint).

For suppliers, the paper suggests ways to create new market opportunities. These include facilitating the greater use of digitalisation and enabling electronic signature and verification of customers.

The Commission envisages publishing an Action Plan on Retail Financial Services to follow up the consultation some time in summer 2016.

BACKGROUND

For more information, see ‘Retail financial services’ on the European Commission’s website.

KEY TERMS

* Retail or consumer financial services are financial services offered to ordinary consumers. This covers a wide range of products including

• retail banking and current accounts (i.e. accounts from which money may be withdrawn without notice),
• payment services,
• credit cards,
• mortgages and
• different kinds of insurance (e.g. life, travel, motor, health or home insurance).

ACT

Green Paper on retail financial services — Better products, more choice, and greater opportunities for consumers and businesses (COM(2015) 630 final of 10.12.2015)

last update 30.05.2016