PURPOSE: to launch a debate at EU and national level on how to ensure a further opening of the European market in retail financial services.
CONTENT: retail finance provides a number of services that are essential for citizens: current accounts, pensions and savings, mortgages and financing other purchases, personal insurance against health problems or accidents and property insurance.
But Europe-wide markets in retail financial services do not really exist at present. Only a small minority of retail financial service purchases take place across borders. There are many good products that exist in domestic markets, but it is difficult for consumers in one EU Member State to buy products provided in another. Furthermore, prices vary widely across the EU: for example, motor insurance for ordinary citizens.
The Commission considers that digitalisation could help bring down prices and improve the comparability of products, empowering consumers in their financial choices. In the long run, digitalisation should allow firms to make their products available anywhere in the Union, bringing a single European market closer to reality.
Building confidence, will, however, be crucial to the expansion of the single market in this area: confidence among companies that they can do business across borders and trust among consumers that if they use a service across borders their interests will be protected.
The Commission's goal is to maximise the practical benefits of a single market in retail financial services for as many European consumers as possible by opening up the market, so that they have a bigger and better choice of financial products.
The Green Paper complements other key pieces of Commission work:
Retail financial services are also subject to a wide variety of requirements and regulations at EU and national levels with the aim of protecting consumers and encouraging an internal EU market for these services.
CONTENT : the Green Paper is an opportunity to make proposals on how the European market for retail financial services namely insurance, loans, payments, current and savings accounts and other retail investments might be further opened up, bringing better results for consumers and firms, whilst maintaining an adequate level of consumer and investor protection. It seeks to identify the specific barriers that consumers and firms face in making full use of the single market and ways in which those barriers could be overcome, including by making best use of new technology, subject to appropriate safeguards.
The goal is to make it easier:
The Green Paper therefore explores:
Obstacles to cross-border activity in the market for retail financial services: the Commission states that the obstacles originate from two main groups of root causes affecting both suppliers and consumers, which act together to keep the European market fragmented:
The Commission is particularly interested in whether the use of innovative digital technology can assist in solving any of these obstacles.
Helping consumers to buy financial products cross-border: whether purchasing life insurance, using a mortgage to buy a home, moving abroad or saving money for the future, consumers should be able to (i) know what is available elsewhere in the EU, (ii) get competitively-priced products suited to their needs, and iii) be confident that their products are safe and suitable and will act in the way they intend.
Customers should be better informed of the different financial services and insurance products available in the EU. It is also necessary to determine whether new measures are needed to:
Creating new market opportunities for suppliers: the Green Paper also focuses on how the Commission could help to reduce the costs and risks inherent in providing financial services cross-border, making this possible for firms and increasing competition and consumer choice across the EU. It is necessary to determine if new measures are needed to:
Next steps: interested parties are invited to send their answers to the questions in the Green Paper by 18 March 2016 through the online questionnaire.
The Commission will organise a conference in early 2016 to examine the evidence yielded by the consultation and discuss priority areas mentioned in the Green paper. It envisages publishing an action plan on retail financial services to follow up the consultation around summer 2016.