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BackIt is currently difficult for consumers to use financial services (such as bank accounts, savings accounts, insurances and mortgage loans) in another Member State of the European Union or to transfer these from one EU Member State to another.
The already mentioned Green Paper was presented on 10 December 2015 in connection with ongoing projects of the European Commission concerning the Digital Single Market, the Capital Markets Union and the Single Market Strategy. The aim of the Commission is to ensure that in future financial services will be provided throughout the EU. Currently such products are only available in the country of residence. Transferring a bank or savings account to another EU country is almost impossible.
With the help of the simultaneously started public consultation, the European Commission wants to examine financial services from a consumers' point of view and determine how competition, transparency and selection may be promoted. This goes hand in hand with the intention to make it easier for businesses to offer their products in other EU countries. In the opinion of the Commission, this in turn would result in a significantly wider range of products for consumers, which could be used throughout Europe. According to the Commission, it shall be ensured that when using financial services in another EU state, consumers will be protected suitably and that appropriate security standards exit.
EU Commissioner Jonathan Hill (responsible for Financial Stability, Financial Services and Capital Markets Union) commented, that because of the barriers in this area, which currently existed in the European market, consumers often were not able to choose the best offer and would incur significantly higher costs. A unified single market would enable consumers to benefit from competition and make a Europe-wide choice of different financial services possible.
In addition, the European Commission wants to use this consultation to determine the effect of digital technologies on the markets. As besides the opportunities, which both consumers and businesses had by using digital services, there was also a challenge with regard to regulations and consumer protection.
From the point of view of consumers, an increase in competition, which might result in price reduction and a wider range of products, is certainly an advantage. However, it is questionable whether all consumers have the same access opportunities – for example, if modern means of communication are not or no longer available. It is possible that all this is only opening another field of activity for financial advisors, which due to charges and advisory fees may result in higher costs and an additional burden for consumers. It is already very difficult to oversee the entire domestic market. Apart from that, it seems to be necessary to raise security and protection standards to a very high level. In this context, the question as to how cross-border disputes can be settled cost-effectively for consumers must also be addressed.
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