European Commission to consult on European consumer banking needs

Many consumers in the EU find it difficult to access financial service products such as bank accounts, mortgages and insurance across member state borders, while businesses find it hard to provide them, the Commission said.

The consultation will look at financial services from the consumer's perspective, with a view to improving competition, transparency and choice, and will try to identify the barriers consumers face when they want to use these services across borders, the Commission said.

The goal is to make it easier for companies to offer their retail products in other member states, giving consumers access to a much wider range of products. People should also be able to take these products with them if they move to another EU country, the Commission said.

Just 3% of consumers have purchased a banking product such as a credit card, current account or a mortgage from another EU member state, and cross-border loans amount for less than 1% of the total within the euro area, it said.

"Not all consumers and businesses want to be active on a cross-border basis. The purpose of the consultation is to make sure that those who do want to purchase cross-border financial services are able to do so, subject to an adequate level of consumer protection and security standards," the Commission said.

The consultation will also look at the impact of digital technology on the market. "Digital services such as online banking, peer-to-peer lending or price comparison websites present many opportunities for the providers and consumers, but can also pose a regulatory and consumer-protection challenge," it said.

Jonathan Hill, European commissioner for financial stability, financial services and capital markets union, said: "Financial products like bank accounts, mortgages and insurance are hugely important in the daily lives of millions of Europeans. But people often miss out on the best deals, or pay over the odds because of the barriers that exist in the European market."

"In this, as in other areas, the single market can bring benefits by helping consumers enjoy more competition and pick from the best that Europe has to offer. I hope that citizens and businesses will respond to this consultation to share their experiences and suggest how we can best tackle these barriers," he said.

The consultation will run until 18 March 2016.

Banking expert Michael Ruck of Pinsent Masons, the law firm behind Out-Law.com, said: "The move to enable cross-border competition for banking activities and products is a clear indication that the Commission is looking to open up banking services products both to those in different territories but also to those who have previously found it difficult to access such services and products."

"A key challenge for banks will be to identify the various regulatory requirements applicable across the different territories and to ensure those products and services meet these requirements," Ruck said.

Last month the European Central Bank (ECB) asked for feedback on draft regulations that aim to finalise the harmonisation of banking regulation across the European Union. The ECB is responsible for harmonising banking regulations across the European Union, under the Single Supervisory Mechanism (SSM). The bank has published a draft regulation and draft guide, laying out an SSM-wide policy on the options and discretions available to competent authorities in the EU.

In August, the European Banking Authority (EBA) published final guidance on the operation of a system it hopes will lead to mortgages being more frequently provided across European borders.