EU regulators raise concern over risk of digital financial risk
A joint report by the EU’s banking, insurance and markets watchdogs has raised concern over the risks associated with digital finance. Noting that digital finance had opened new synergies between financial and non-financial activities, the report also pointed out that the same services introduce systemic risk into the financial services market. Using examples of social trading where social media is used to give investment advice, the report notes that such activities can increase uptake of financial services but risks as well. It therefore calls for a more holistic supervision of financial services, and consideration of mixed activity groups such as Amazon, Google, Meta’s Facebook, Apple offering financial and non-financial services. The joint report was in response to the European Commission’s Call for Advice on digital finance, which was published in February 2021.