Single European Market - Retail Financial Services


Single European Market - EU Commission Green Paper on Retail Financial Services

December 2015

On 10 December, the EU Commission published a Green Paper on retail financial services: better products, more choice and greater opportunities for consumers and businesses.

Key points

The paper is very high-level and wide-ranging. It does not put forward policy proposals, but consults on a number of questions aimed at improving products, choice and opportunities for firms and consumers across insurance, loans, payments and savings accounts and other retail investments. It seeks to make it easier for companies to sell into other Member States, consumers to buy products from other Member States, and for consumers to take all their products with them if they move to another Member State (“portability”).

The paper finds that in the EU there are fragmented markets and insufficient competition; limited cross-border activity; differences in price and choice across Member States; and minimal consumer switching.

The report highlights the role that new players and new techniques in the digital market might have in improving competition and choice. It also discusses how, in the area of payments in particular, new opportunities are emerging with the development of mobile, internet and instant payments.

The Green Paper is intended to complement other EU Commission initiatives, such as the Capital Markets Union, the Digital Single Market, and the Single Market Strategy. It demonstrates how the Commission has entered a new phase of activity, where the focus is on improving growth and the single market. There is a clear trend now in the EU of policymakers and regulators seeking to remove barriers to digital innovation.

Areas consulted on in the Green Paper

  • Raising the awareness of consumers about products on offer in different Member States and helping consumers to switch products. The Commission suggests that one way this could be done is through consumer access to channels e.g. financial intermediaries, independent comparison websites, or independent financial advice services. Consumer engagement could also be promoted through targeted disclosure at key moments when a consumer may benefit from changing products e.g. when a bonus period is due to end.
  • Whether action is needed to address “excessive fees” (e.g. transaction charges and currency exchange fees) that consumers can face when transferring money involving different currencies in the EU, or to help consumers understand the currency conversion rate that is applied to cash withdrawals or purchases with payment cards in Member States with a different currency.
  • How to increase consumer access to products from other Member States to limit unjustified discrimination on the grounds of residence. The Commission also states that it will publish legislative proposals in mid-2016 to end unjustified “geo-blocking” (where consumers’ access to websites is blocked because of their location).
  • Taking action to facilitate portability of retail financial products e.g. life assurance and private health insurance, and promoting the recognition of personal indemnity insurance cross-border.
  • Improving the transparency and comparability of products e.g. through disclosure, consumer organisations posting reviews, or digital solutions.
  • Strengthening the redress architecture e.g. increasing consumer awareness of the Financial Dispute Resolution Network (FIN-NET), which was set up in 2001 to facilitate the resolution of cross-border disputes in financial services.
  • Whether action is needed to protect the victims of car accidents in other Member States, in cases where the insurance company becomes insolvent, and whether further measures could be taken to enhance transparency about ancillary insurance products e.g. add-on products in the car rental market.
  • Supporting firms in creating and providing innovative digital services across the EU, with appropriate levels of security and consumer protection.
  • Improving the ability of firms to identify customers at a distance for Anti-Money Laundering (AML) purposes and whether further action is needed to promote the uptake and use of e-IDs and e-signatures.
  • Improving access to and usability of financial data e.g. so that a lender can access credit information of a consumer who lives in another Member State.
  • Whether further action is required to support firms in providing post-contractual services (e.g. claims handling) in another Member State without a subsidiary or branch.
  • Encouraging lenders to provide mortgages or loans cross-border.
  • Making it easier for firms to navigate the various legal and regulatory requirements in host member states e.g. by Governments or regulators setting up ‘one-stop-shops’ to help facilitate cross-border sales, harmonising EU regimes, or establishing an opt in regime for a pan-European life insurance product.


Making it easier for firms to sell into other Member States will increase opportunities for financial services firms. However, we are only at the start of this process. There are a number of practical difficulties that may make this goal difficult to achieve, for example, language barriers and differing risk profiles in each Member State. The greatest opportunities may be where barriers can be reduced between countries with the same language or with respect to consumers who live near a border with another Member State. Firms should also consider use of digital distribution on a cross-border basis.

Increasing transparency in pricing and access by consumers to products in other Member States might also, in the long term, have an impact on pricing and competitiveness. Currency conversion rates, transaction charges and currency exchange fees involving different currencies in the EU may also face regulatory pressure.

Next steps

Responses to the Green Paper are due by 18 March 2016.

The Commission will organise a conference in early 2016 to discuss the results of the consultation and plans to publish an Action Plan on Retail Financial Services in Summer 2016.

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