Benefitting EU consumers while Adhering to Laws
The European Union and other countries in the region have new regulations that level the playing field between traditional financial institutions and new Fintech players.
Between the years of 2018 and 2020 European Commission adopted and developed an action plan on FinTech to foster a more competitive and innovative European financial sector. The new regulations and action plan were constructed to enable innovative business models to scale up at EU level and support the uptake of new technologies such as blockchain, artificial intelligence, cloud services, increased cybersecurity measures and the integrity of the financial system. Moreover the Commission wants to promote a well-regulated data-driven financial sector for the benefit of EU consumers and firms. However, information stored on the cloud presents potential issues, such as data sovereignty and privacy concerns involving customers. This is of vital interest to virtual banks – after all, the cloud is core to these banks’ business model and even identity.
The rise of new technologies has brought forward concerns for both the regulators and the customers. Concerns about data security have not gone away since banks now hold vast amounts of sensitive data on their clients.
It’s a good sign that the region’s regulators are reviewing policies that will allow for a better understanding and use of the cloud environment – especially in the areas of security and data privacy – and enable banks and other financial institutions to make the most of their new technology. Yet another positive development is that the technology industry is keenly receptive to regulators’ concerns and devising imaginative solutions to reduce the risks. Without doubt, the world of banking has changed for the better, and institutions that fully utilize cloud technology and are innovative in their offerings are the ones best placed to become market leaders, regardless of their vintage.
Indeed, banks looking to enter this increasingly competitive field need a solid partner to guide them through the dynamic, fast-evolving world of cloud technology. Temenos, which was the first to put a core banking system on the public cloud, is ideally placed to fulfil this role. Temenos can help digital banks join the growing ranks of digital-only players and assist traditional banks keen on migrating to the cloud to compete on a more equal footing in a rapidly transforming industry.