In late 2016, the European Banking Federation called on the European Commission to create a plan for an EU-wide fintech testing environment.
The European Banking Authority (EBA) banking stakeholders group made a similar recommendation last year, adding that the EBA should take the lead in developing guidelines to achieve harmonization in regulatory practices and supervisory criteria on nationally established sandboxes.
Proponents of a pan-European fintech testing platform have been buoyed by the progress of the Financial Conduct Authority’s (FCA) sandbox, which has motivated regulators from various parts of the continent to introduce similar programmes.
The Danish financial supervisory authority was the latest to follow the FCA model, announcing at the end of last year the creation of a platform where selected fintechs are able to test their business model for up to six months before they apply for a full licence.
Benefits and challenges
The CFA Institute has suggested that the European Commission’s legislative proposal for an EU framework on crowd and peer-to-peer finance creates a precedent for exploring the possibility of creating an EU-wide sandbox and investigating the benefits and challenges such a regime.
