Opening remarks by Commissioner McGuinness at the Digital Finance Platform's phase 2 launch: the Data Hub

Data Hub

Good morning to all our panellists and participants.

I think, Jan [Ceyssens], you set the scene really well by saying normally you think of us as regulators.

But today we're doing something different, and something that is in my view really important and very significant.

Yes, we legislate, we do regulate, but we also want to support innovation.

And this is why today is an important event.

Our Digital Finance Platform is a very different project when you think of us and how we've operated in the past.

And now we're talking about the next phase of this project – the Data Hub.

Another good example of how, as regulators, we can also be innovators.

And we know that more and more of us are embracing digital finance – almost without knowing it!

It was already happening – but then Covid really accelerated this trend.

And indeed we all have had experiences of not having our wallets with us, and then realising our phones could do the work for us when it comes to transactions.

It certainly was my experience during Covid.

Also if you recall during Covid, it was also a time when money was flowing into cryptocurrencies.

Fraud and scams since then have made everyone I hope much more cautious about the promise of crypto – but there is still an appetite as we know for crypto.

Tokenisation and distributed ledger technology are here to stay and most likely will grow in importance.

And today the big topic of course is artificial intelligence.

AI is enabling more personalised financial services, like tailored financial advice for consumers.

And behind the scenes, AI can make finance more efficient – offering the chance to analyse huge amounts of data or to automate processes.

At the same time, the increasing use of AI exposes consumers and finance to risks.

AI is built on data.

And to put it frankly, if you put rubbish in, you get rubbish out.

There are also risks of unintended bias or discrimination.

Accountability and governance matters for AI.

So a vibrant and trustworthy digital finance eco-system needs to have the right rules in place, to allow us embrace those benefits of digital finance, while guarding against the risks.

We rely on effective cooperation between regulators and innovators.

The European Union is taking the global lead in creating regulatory certainty, which helps innovators.

For crypto, we are fully on track for the Markets in Crypto-Assets Regulation, or MiCA, and that will apply from June of this year.

For distributed ledger technologies in finance, we have our pilot regime in place.

And this allows companies to safely experiment with issuing, trading and settling shares or bonds using DLT.

The AI Act – which should be adopted before the European elections – is set to regulate the use of artificial intelligence in the European Union.

For innovators in a heavily supervised sector like finance, regulatory certainty is a competitive advantage.

Because regulation means that all companies can compete fairly, whether new to this area or well-established.

And regulation also helps build trust with consumers by protecting their interests.

Now beyond regulation, there are other supports that we can offer businesses.

We can encourage innovative projects that have the potential to transform the financial landscape with grants and other initiatives.

This support not only fosters new ideas and technologies, it also helps to bridge the gap between supervisory authorities and the financial sector.

And we are working on developing cooperation and partnerships between different stakeholders in the digital finance ecosystem.

And that's what today we're talking about – a different type of project to support innovation.

Just two years ago, we launched the Digital Finance Platform.

And the idea was to connect innovative financial companies and financial supervisors in the European Union.

And this Platform provides resources, guidance, and networking opportunities for stakeholders in the digital finance ecosystem.

Today, we are officially launching a new feature of the platform: the Data Hub.

And this is the result of a year's work by my services with the help of authorities throughout Europe.

And of course I want to give a big thank you to everyone who is involved in this project.

Data, information, is more and more important in finance.

And access to high-quality, relevant data has become increasingly vital for financial companies to thrive.

And so we started to think about how we could enable access to more data to more companies.

There are already many initiatives in the industry related to data sharing, supported by EU law that enables data sharing.

The Digital Operational Resilience Act helps companies share data about cyber-risks, and that's just one example.

And we are enabling sharing beyond the financial sector, too.

Starting this month, the Digital Markets Act is enabling financial companies to access data from so-called gatekeeper platforms – the big or indeed the huge tech companies.

Data isn't just limited to the private sector.

Supervisors hold a lot of data which can be very valuable.

And we've thought about how we can enable companies to access that data, while maintaining the highest standards of privacy.

And the result is this new Data Hub.

And here, the goal is to encourage financial supervisors and innovative companies to work together through data sharing.

This hub will give financial companies access to supervisory data to test new solutions and train AI models.

And it's data that companies can use to test solutions.

So to comply with confidentiality requirements, DG FISMA and the supervisory authorities decided to build the data hub using synthetic data.

Synthetic data is artificial data generated from original data.

And as you see, I'm still learning about all that happens in this AI space!

And this data, this synthetic data, it's trained to reproduce the characteristics and structure of the original data.

So synthetic data is still useful for testing new applications and training AI and Machine Learning models.

And it allows financial supervisors to participate in the Data Hub – without making the original data they hold accessible to a third party.

Supervisors can also benefit from the Data Hub, because it will allow them to learn more about the technologies that innovative financial firms are using.

So the Data Hub is very much a collaborative effort between European authorities and market participants.

This work complements the national sandboxes and innovation hubs that facilitate dialogue between supervisors and innovators.

Our Data Hub is steered by the digital finance unit in DG FISMA, working closely with the European supervisory authorities.

And I look forward to Fausto Parente's contribution just after me from the point of view of the European Supervisory Authorities.

DG FISMA and the European Supervisory Authorities are also working closely with national financial supervisors, who provide the data available in the Hub.

Of course, we want to be sure that our Data Hub is as useful as possible.

That means looking at market participants, what they might want to use the data for, and what data sets would be most useful for them.

And the idea is to match data needs in the financial sector with data sets that financial supervisors hold.

In March last year, DG FISMA consulted a wide range of innovative firms.

And we've just published another call for proposals.

And this will be open until April 26th.

So an open invitation to everyone involved and indeed those who are listening in today to get involved, and to recall that the deadline for proposals is April 26th.

So send those to us as soon as you can.

Because you can shape the Data Hub, so that it works for you.

So I just want to conclude by saying that we have put a lot of effort into creating this platform, and now into this new Data Hub.

And again, appreciation to my services in DG FISMA for all this very detailed work that they have put into the project.

I think it very clearly demonstrates that beyond regulation, we are capable and indeed we want to be involved in innovation and creativity!

And of course this is very much a collaborative effort.

And we're relying on all of you in the financial sector to make this work a success.

The Digital Finance Platform exists to support dialogue and cooperation.

I would ask that you make the most of the platform – and of course we look forward to hearing all your feedback.

I think this is a very exciting project and an exciting sector, indeed the whole financial area and digital finance, to be involved in today. It's fast moving.

And I do hope that our work can support your creativity, your new ideas and your innovative solutions.

And that our creativity and innovation can support you in that endeavour.

So thank you very much for joining today, and I wish you all well for a very discussion, and for a future where innovation and regulation work hand in hand, and where data is used for the benefit of all.

Thank you.