There is a new cooperative effort between the European Commission and the United States Consumer Financial Protection Bureau to address how the digitalization of the financial services sector may be impacting businesses and consumers.
In a joint statement, Didier Reynders, Commissioner for Justice and Consumer Protection of the European Commission, and Rohit Chopra, Director of the United States Consumer Financial Protection Bureau (CFPB), said they’ll be engaging in an informal dialogue to address the challenges and risks posed by the ongoing digital transformation within the financial services industry, as well as collaborate on AI policy for financial institutions. Seeing as tech companies are global in reach, international collaboration seems a wise idea.
A Team Effort
Many financial institutions have leveraged a variety of emerging tech and new payment services over the past few years, including artificial intelligence and buy now, pay later. Because the space has accelerated so much, it’s important to make sure it’s properly regulated as well. If not properly managed, these new developments could expose consumers to fraud and manipulation, limit their choices, compromise their data privacy, and lead to personalized pricing discrepancies.
The dialogue that the European Commission and the CFPB are beginning holds great significance as it reflects a proactive approach to address these challenges collectively. By exchanging technical expertise and coordinating on pressing policy issues, both organizations aim to find a balance between fostering financial innovation and ensuring consumer safety.
It’s not uncommon for regulators within different regions to collaborate on various issues and initiatives, particularly when many countries often face similar challenges in overseeing their respective financial industries.
There have been instances of successful collaboration between the UK’s Financial Conduct Authority (FCA) and the U.S. Securities and Exchange Commission (SEC). In 2019, the FCA and SEC signed two updated Memoranda of Understanding (MOUs) to ensure oversight of companies across national borders.