Communication: Consumer Financial Services Action Plan: Better products, more choice

The EU Single Market allows people, services, goods, and capital to move freely in an economy producing around 15 trillion euro annually. It offers new opportunities to European businesses, enhancing competition and leading to more choice, better services, as well as lower prices for over 500 million consumers. A key priority of the Juncker Commission is the achievement of a deeper and fairer Single Market, including through digital means.

Retail financial services are an integral part of people’s daily lives. These services include bank accounts, payment cards, consumer and mortgage credit, insurance and long-term savings products, notably to prepare for retirement. Markets for these services remain fragmented, notwithstanding the high degree of harmonisation that has been achieved over recent years. Only 7% of consumers have purchased a financial service from another EU Member State.

Facilitating access to financial services in other Member States would enhance choice. Customers would benefit faster from innovation; prices would fall, and service quality would be enhanced. Even those who do not shop abroad for financial services would benefit from a more integrated market for consumer finance with more choice. Innovative on-line services are transforming the way people use financial services. They also represent a major opportunity for bringing to all Europeans the benefits of a more deeply integrated Single Market for retail financial services.

Recognising this momentum for change, the Commission presented in December 2015 a Green Paper on retail financial services to consult on the potentials of a more integrated market for these services and the actions needed to achieve this goal. This Action Plan draws the Commission's conclusions from the consultation; it is one of the commitments of the Action Plan on building a Capital Markets Union, and it tackles many of the issues raised by the European Parliament in its report on the Green Paper on retail financial services.

The Action Plan sets out further steps towards a genuine technology-enabled Single Market for retail financial services where consumers can get the best deals while being well protected. In the long run, the distinction between domestic and cross-border providers of financial services should no longer matter. This also has implications for providers who will be able to take full advantage of the potential of a vast Single Market.

Many innovative firms already "think European", and their use of digital technologies would make it easy to reach customers in all Member States. However, technology alone will not be sufficient to address all the obstacles to a Single Market for financial services.

The Commission has identified three main strands of work that should be the main focus during the remaining years of the current mandate to move a step closer to the vision set out above:
- Increase consumer trust and empower consumers when buying services at home or from other Member States;
- Reduce legal and regulatory obstacles affecting businesses when providing financial services abroad; and
- Support the development of an innovative digital world which can overcome some of the existing barriers to the Single Market.

The individual actions identified in this Action Plan will be prepared in accordance with better regulation procedures, including public consultations and impact assessments. The Commission will refrain from regulatory action when market dynamics could result in more integrated and competitive markets for financial services, but it stands ready to use competition rules for taking corrective action when required. This Action Plan is therefore also an invitation to market participants, providers and consumers, to contribute to the creation of a deeper Single Market for retail financial services.

ESO: Background information: Adoption of the Consumer Financial Services Action Plan http://www.europeansources.info/record/adoption-of-the-consumer-financial-services-action-plan/

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