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  • 26-02-2021 16:26

EU/Presidency: EU lagging behind in 'Big Techs' needs to develop 'FinTechs' - BIS


Lisbon, Feb. 26, 2021 (Lusa) - Europe is lagging behind in big tech companies ('Big Techs') and needs to develop financial technology ('FinTechs'), the head of central bank innovation at the Bank for International Settlements (BIS) warned on Friday.

"In the past, Europe was at the forefront of a lot of core sectors, like consumer electronics, telecoms," Leonardo Gambacorta, director of innovation and digital economy at the Bank, responsible for global banking supervision, said at a virtual roundtable organised by the Portuguese presidency of the Council of the European Union (EU) to prepare the High Level Conference on Recovery, scheduled for June.

The speaker recalled names such as Finland's Nokia, Germany's Siemens or Sweden's Ericsson, but warned that currently "there is no European technological giant in new areas such as digital platforms or artificial intelligence".

In these areas, he pointed out, in countries with developed online retailing, the main 'FinTechs' include technology giants (Big Techs) such as Apple, Google, Amazon and Facebook (from the US) and Alibaba, Baidu and Tencent (from China).

"The development of 'FinTech' is one of the most important challenges for Europe in the coming year and obviously regulation plays an important role here," he said, recalling the high amount of credit provided by 'FinTechs' outside Europe, in continents such as America, Asia and Africa, is a race that Europe is losing.

Keynote speaker, John Berrigan of the European Commission, responsible for the union for financial stability, financial services and capital markets (FISMA), argued that regulation cannot solve all problems and that it is also "a problem of fragmentation in the market".

Berrigan gave as an example a German platform similar to Facebook, created around the same time as Facebook, whose service provider no one can remember the name of anymore because it did not develop in the same way.

"We are behind the curve, there is no doubt, compared to other parts of the world," he said, pointing out that Europe is at the forefront in some areas and showing his conviction of an abolition of restrictions still in place in Europe, such as the revision, planned for this year, of the EU consumer credit law, which comes in response to new challenges posed by operators such as 'FinTech' and a strengthening of the protection of financial vulnerabilities.

Closing the event, the Secretary of State for Finance, João Nuno Mendes, praised the "digital revolution" underway in Europe, but acknowledged the "enormous challenge" that banking faces, with new operators entering the business, and the need to "increase scale", stressing that digitalisation "was also made to challenge" the traditional way of looking at the industry.

VP/AYLS // AYLS

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