Fintech has the power to increase the role of capital markets, bringing them closer to companies and investors, says the European Commission.
As it bids to push a 'capital markets union', the Commission is highlighting the role that technology can play as a driver of competition that helps to create a more diverse financial landscape bringing more choices to consumers, companies and investors.
However, "at the same time, the rapid development of fintech poses new challenges in managing risks and ensuring consumers have adequate information and safeguards," warns a communication on the issue.
While individual states are taking their own approaches to regulation, the Commission says that it will continue to promote fintech while fostering a regulatory environment that "strikes an appropriate balance between building confidence in companies and investors, protecting consumers and providing the fintech industry the space to develop".
This means working with member states, the European Central Bank and the European Supervisory Authorities to develop a coordinated approach, says the communication, which you read in full here.