Bringing consumers closer to the heart of finance

Digital,cross-border financial services are far from popular with European consumers, who still prefer the actual contact offered by national retail banks. More efforts are needed to give European consumers better choice, clearly understandable products and affordable services, while making cross border transactions safer and more secure. These were the main takeaways from a debate held at the EESC on 26 September.

The event, entitled Consumers at the heart of finance in Europe, was organised by the EESC's Internal Market section (INT) in cooperation with the European Retail Financial Forum (ERFF). It brought together, among others: EESC members Ariane Rodert, President of the INT section, Petru Sorin Dandea, rapporteur on the FinTech action plan, Carlos Trias Pintó, rapporteur on the Sustainable Finance Action Plan and the Regulation on disclosures and advisement and co-rapporteur on the Consumer Financial Services Action Plan; consumer representatives Evangelia Kekeleki and Claude Mader; MEPs Othmar Karas and Molly Scott Cato; Renatas Mazeikas, European Commission head of unit for Consumer policy; ERFF representatives; and consumer organisations and national public officials.

Debates were structured around two panels:

  • Cross border conversions, mergers and divisions
  • Building transparency and trust for a sustainable future

Participants agreed that European consumers do not accept full digitalisation, as physical contact is still very important for them. Only 7 % currently use cross-border financial transactions. Lack of confidence is compounded by uneven transposition of EU consumer legislation across Europe. While far from being at the heart of finance, consumers should be made its main focus, the conference concluded.

The first panel stressed that Member States should convey to their citizens both the potential and risks of cyber security and data protection in order to make the Digital Single Market a reality. It pointed to the need to promote confidence by advising consumers on their rights and by providing easy access to redress, revealing that 74% of the 48 000 requests for assistance handled by the ECC-Net concerned e-commerce.

Speakers noted that Fin Tech comes with opportunities for greater competition and lower costs for consumers, but raises concerns relating to automated advice, the use of artificial intelligence and big data, and the operation of financial platforms.

The panel stressed that the Commission proposal could create a secondary market for non-performing loans with great dangers for consumers, who had already paid the costs of the financial crisis. Financial advice made consumers hope they could choose the right financial products, but data showed that financial services ranked rock-bottom among all sectors in terms of consumer trust and satisfaction.

The second panel pointed to sustainable finance as a key to a sustainable economy, with studies showing that 70 % of investors cared about the environment. Rating agencies assessing the quality of financial products should also provide clear information about what use was made of investments, it was stressed.

One recommendation was to define simple, comparable and transparent "flagship products" for consumers across the EU via various digital distribution systems, encouraging consumers to trust these products.

Linguistic and legal differences, higher charges and lack of access to certain financial services and products for non-residents, tax differences, currency exchange risks, etc. were obstacles to remove. The need for digital distribution channels to apply the principles of technological neutrality, proportionality and integrity was stressed, against a backdrop of 60 to 70% of consumers opposing disclosure of their data to 3rd parties. (dm)

In the photo, from left to right:  EESC members Carlos Trias Pinto, Ariane Rodert and Michael Ikrath, MEP Othmar KARAS and ERFF's Fiona Murray