The European Banking Authority Has Warned Of The Dangers To UK Payment Institutions In The Event Of A No Deal Brexit
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The European Banking Authority has Warned of The Dangers to UK Payment Institutions in The Event of A No Deal Brexit

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by Alan Jackson — 5 years ago in Entertainment < 1 min. read
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The European Banking Authority has warned of the dangers to UK payment institutions in the event of a no-deal Brexit.

While the main focus of cliff-edge Brexit analysis remains on financial stability and the continuity of wholesale markets, notably derivatives, the regulatory body is growing increasingly concerned about the preparations of smaller and less sophisticated institutions and, in particular, payment and e-money
institutions.

“The latter is of particular importance from an EU-27 perspective, because of the large volumes of payments business being offered by UK-based institutions through their cross-border passporting activities,” says the EBA in its annual risk assessment report. “”For such institutions, contingency planning, including relocation, where appropriate, is needed, and effective communication with customers ex-ante to prepare for any disruption is vita.”

The report also addresses the potential impact to bank profitability from the rise of non-bank fintech competitors. The EBA finds that the emergence of disruptive startups is forcing banks to rethink their business strategies and operating models.

Also read: Apple CarPlay Not Working? Here’s 7 Troubleshooting Tips

Banks’ strategies in this area include partnerships with startups as well as internal developments of technology-based products and services using new technologies, states the EBA, citing biometrics, digital/mobile wallets and Big Data analytics.

While one out of three EU banks had no investment in non-bank fintech firms during 2017, there is a growing investment appetite, notes the EBA.

“These investments are made mainly through venture capital funds and to a lesser degree through direct acquisitions,” states the regulator. “According to the RAQ (Risk Assessment Questionnaire) results, more than 60% of EU banks are planning to increase their investments in the next 12 months.”

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Alan Jackson

Alan is content editor manager of The Next Tech. He loves to share his technology knowledge with write blog and article. Besides this, He is fond of reading books, writing short stories, EDM music and football lover.

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