Growth of platform banking catches EBA’s eye

The European Banking Authority (EBA) published on 21 September 2021 a Report on the platformization of the EU banking and payments sector.

Platformization refers to the increase use of digital platforms in the banking sector, also called platform banking.

The EBA identifies a rapid growth in the use of platform banking to bring customers and financial institutions together and expects this trend to accelerate in line with the wider trend towards the digitisation of the EU financial sector.

The EBA recognizes that “platformization” of these services presents a range of potential opportunities for both EU customers and financial institutions. For example, digital platforms can facilitate access to financial products and services, including cross-border products and services.

However with platform banking, new forms of financial, operational, and reputational interdependencies are emerging over which supervising authorities may have limited visibility. Hence according to EBA steps should be taken to strengthen supervisory capacity to monitor market developments regarding platform banking.

The EBA sets out in the report steps to enhance supervisory capacity to monitor market developments. EBA will focus in 2022 on providing competent authorities with support and information to deepen their understanding of platform-based business models and the related opportunities and risks.

Focus Points

With a view to have an open eye on the future, we follow up on specific (legal) topics at the heart of modern businesses in transition.