Dáil Éireann Debate, Thursday - 22 June 2023
202. Deputy Mairéad Farrell asked the Minister for Finance his plans for the additional regulation of fintech companies providing banking services and holding an Irish banking licence; and if he will make a statement on the matter. [29294/23]
View answerFintech firms use technology to deliver financial services and products to consumers. These services and products could be anything that relates to finance, including banking, insurance, and investing. Some fintech firms do not directly provide services to the consumer but instead use technology to support financial services. Any firm that offers a banking service, or a range of banking services, to Irish consumers must hold the relevant license or authorisation. This applies to all firms whether or not the service is delivered totally online.
The Retail Banking Review, which was published in November 2022 by the Minister for Finance, identified a number of areas requiring regulation within the Irish banking sector and provided a number of recommendations to address them.
Firstly, access to cash and banking services were identified as areas requiring specific attention. One recommendation contained within the report was for the Department of Finance to develop Access to Cash legislation, and prepare heads of a bill in 2023. The Review also called on Department officials to prepare heads of a bill in 2023 to require ATM operators to be authorised and supervised by the Central Bank and to provide the Central Bank with responsibility and powers to protect the resilience of the cash system including the authorisation and supervision of cash-in-transit (CIT) firms in respect of their cash handling activities and related financial services. Work on the preparation of the heads of bill is underway.
Secondly, the Banking Review also contains two recommendations that could potentially result in additional regulation for Fintech companies depending on their activities and whether they provide finance to SMEs. Following consultation with stakeholders, the Department of Finance will prepare legislation to require providers of credit to SMEs to be authorised and supervised by the Central Bank, so that all SME borrowers benefit from the protections of the Central Bank’s SME Regulations. The Central Bank will review and amend the SME Regulations to take account of legislative changes and developments in the revised Consumer Protection Code, particularly digital/online matters, automated decision making and customer charters and service standards.
Also, it should be noted that the Central Bank of Ireland is currently conducting a comprehensive review of the Consumer Protection Code 2012 (“Code”). The Code applies to the regulated activities of financial services providers authorised, registered or licensed by the Central Bank and financial services providers authorised, registered or licensed in another EU or EEA Member State when providing services in this State on a branch or cross border basis.
The Review was launched with a Discussion Paper on the topic of consumer protection in financial services. The Discussion Paper seeks views on specific consumer protection topics including: availability and choice of financial products, firms acting in consumers’ best interests, innovation and disruption, digitalisation, vulnerability, financial literacy and climate matters.
The Public Consultation phase, which is expected to launch in Q4 2023, will see the publication of a Consultation Paper setting out specific proposals on how the Code should be updated and improved. This will be accompanied by draft regulations. The aim of the consultation will be to seek views from interested stakeholders on proposed changes to the Code, and to ensure clarity and transparency with regard to the proposed measures.
