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BANCA SELLA HOLDING S.p.A.

Question 1: Are the issues identified by the EBA and the way forward proposed in section 4.1 relevant and complete? If not, please explain why.
It is necessary to foresee in Europe a regulatory standard for derogations within sandboxes and innovation hubs and to avoid the violation of the level playing fields.
All areas of further analysis identified are relevant. Possible additional investigation focus might be: 1) whithin point 74.a (national regulatory regimes) a focus could be privacy regulation: opportunities and obstacles with regard to new data-driven service models; 2) the role (and need) of standards in fintech market (es.common taxonomy, assessment criteria, ..); 3) cross-border digital identity is also a key topic in order to enable cross-border certification and identification.
Question 2: Are the issues identified by the EBA and the way forward proposed in subsection 4.2.1 relevant and complete? If not, please explain why.
Another risk is related to the use and audit of artificial intelligence algorithmic infrastructures, when they work like "black box" for users and auditor. In this context should be useful to trace and store the information related to machine learning activity.
Question 4: Are the issues identified by the EBA and the way forward proposed in subsection 4.2.2 relevant and complete? If not, please explain why.
Fluctuation of margins, customer centricity, ICT security and frauds.
Question 6: Are the issues identified by the EBA and the way forward proposed in subsection 4.3.1 relevant and complete? If not, please explain why.
Fast prototyping and agile organization could be an additional focus topic.
Question 7: What are your views on the impact that the use of technology-enabled financial innovation and/or the growth in the number of FinTech providers and the volume of their business may have on the business model of incumbent credit institutions?
In order to exploit huge economies of scale, a possible consequence is the increasingly centralized customer service. More specifically, processes may evolve in order to enable centralized teams to hadle client relation and service so that most of activities will be robotized or authomized and risk mitigated through algorithm setting (es. robotized check of client risk factor).
Question 9: What are your views on the impact that the use of technology-enabled financial innovation and/or the growth in the number of FinTech providers and the volume of their business may have on the business models of incumbent payment or electronic money institutions?
Impact could be introduction of new distruptive innovation such as block chain so that market share shrink and business models will have to become more flexible and adaptive to "exploit" te new trend and market. The market share will likely increase for those who will invest in the new technologies.
Question 10: Are the issues identified by the EBA and the way forward proposed in subsection 4.4.1 relevant and complete? If not, please explain why.
Regulation represent a majour aspect to be considered when banks seek to introduce analytics througout the client lifecycle. For instance, the use of web and mobile analytics to customize UX. A possible focus point could be whether analytics tool aimed at improving client satisfaction through offering siutable products/services should be subject to client explicit authorization.
We agree with the issues identified and way forward proposed regarding consumer protection. For example we think that the work done with the EBA Guidelines on authorisations under PSD2 should help to
ensure the consistent application of the legislative framework including consumer protection rules. On the other hand we underline as the scope of said Guidelines, in line with PSD2 scope, is only related to some Cluster B services (see “Table 1 Financial service type/cluster”; pag 18), so that a more broader approach is necessary to reach the same consistent application for services out of the scope of the PSD2.
Question 11: Are the issues identified by the EBA and the way forward proposed in subsection 4.4.2 relevant and complete? If not, please explain why.
Yes
Question 12: As a FinTech firm, have you experienced any regulatory obstacles from a consumer protection perspective that might prevent you from providing or enabling the provision of financial services cross-border?
cross-border digital identity is a key topic in order to enable cross-border certification and identification
Question 13: Do you consider that further action is required on the part of the EBA to ensure that EU financial services legislation within the EBA’s scope of action is implemented consistently across the EU?
By setting standardized best practices and limitations, sorrounded by concrete examples of what is and what is not allowed, the risk of non-compliance would be lower, the armonizations across countries strenghten and the role of internal control departments (compliancee, risk, legal) less driven by interpretation.
Question 14: Are the issues identified by the EBA and the way forward proposed in subsection 4.4.3 relevant and complete? If not, please explain why.
Yes
Question 15: Are the issues identified by the EBA and the way forward proposed in subsection 4.4.4 relevant and complete? If not, please explain why.
Yes
Question 17: Are the issues identified by the EBA and the way forward proposed in subsection 4.4.5 relevant and complete? If not, please explain why.
Two possible additional proposals could be:
1) giving concrete incentives to financial institutions in order to train customers, making them more aware (es. through campaigns) and overall digital tools and digital security;
2) require / foster the presence of Fintech specific subjects in current tertiary education learning path (es. economics and management). Also through scolarships.
Question 18: Would you see the merit in having specific financial literacy programmes targeting consumers to enhance trust in digital services?
Yes (see Q.17)
Question 19: Are the issues identified by the EBA and the way forward proposed in subsection 4.4.6 relevant and complete? If not, please explain why.
Yes. With a strong accent on regulatory framework which is major source of limitation (es. applying predictive models only to those clients who formally allowed it)
Question 21: Do you agree with the issues identified by the EBA and the way forward proposed in section 4.6? Are there any other issues you think the EBA should consider?
Yes, we agree with the issue identified by the EBA. We consider necessary to have equal regulations in all the countries of the Union especially in order to the excution to the CDD
Question 22: What do you think are the biggest money laundering and terrorist financing risks associated with FinTech firms? Please explain why.
We think that the most important risk about AML/CFT depends from not sufficient customer knowledge and inappropriate sensitivity and training in AML for Fintech firms.
Question 23: Are there any obstacles present in your national AML/CFT legislation which would prevent (a) FinTech firms from entering the market, and (b) FinTech solutions to be used by obliged entities in their customer due diligence process? Please explain.
We think that national rules regarding Archivio Unico Informatico (AUI) and fiscal code for customer makes more difficult than rules in others countries.
Contact name
ELIO TIRRITO