European competitiveness is the guiding principle of the current EU leadership. Making the EU internationally competitive is Brussels' declared goal. But what does true competitiveness look like, and how can we ensure it benefits all Europeans?
The Commission’s Draghi report rightly identifies the financial sector as a key driver of European competitiveness. Still, the real challenge lies in making this work for everyone – not just those who are comfortable with digital technology or those who easily qualify for traditional bank services.
Competitiveness is not about supporting the biggest players or the most innovative start-ups. It is about creating a financial system that works for all Europeans, especially those who fall through the cracks of traditional banks: People living in rural areas, where access to financial services is often limited, people with irregular incomes or people with no or broken credit history.
The financial needs across Europe tell an important story about our economy. While some Europeans enjoy comfortable savings buffers, many others are unable to manage basic unexpected expenses like car maintenance or new fridge purchase or struggle to access basic financial services for their everyday needs: education expenses, healthcare bills, home improvements, and micro-business development.
These are not just personal financial matters – they are the building blocks of a competitive economy. True competitiveness means ensuring that all Europeans can access the financial services they need to participate fully in economic life.
Digital finance and new data-sharing initiatives will help improving how we serve these needs. The EU's newly proposed financial legislation aims to make it easier for customers to share their financial information with trustworthy financial service providers.
This could help automate many processes and lead to lower prices and better, more tailored services. But for these changes to work, we need practical solutions: Creating clear rules that businesses can follow, making sure different financial providers can safely share information when customers request it, and giving companies realistic implementation timeframes.
The cross-border dimension adds another layer of complexity. Currently, every market has different rules for data sharing, creditworthiness assessment, and customer interaction. True competitiveness requires harmonisation that makes sense, not just on paper, but in practice.
We see great potential for cross-border financial services within Europe – imagine a Lithuanian fintech serving customers in Spain, or an Estonian digital bank supporting small businesses in Greece.
These possibilities exist, but the regulatory framework must enable, not hinder, such European cooperation. However, technology alone is not the answer. Research shows that 34% of customers are concerned about their financial literacy and understanding of financial services. Any competitiveness agenda must include investment in financial education and digital literacy.
Four priorities must be in Brussels’ focus for the 2024-2029 legislative period. First, create rules that help financial companies better serve people's real-world needs. Second, help companies make fairer lending decisions by seeing a customer's complete financial picture. Third, give businesses enough time to properly implement new technologies. Fourth, make it simpler for financial services to work smoothly across different European countries.
The EU has the unique opportunity to show that competitiveness and inclusion are not opposites, but complementary strengths. By creating the right regulatory framework, we can make sure that digital finance is a bridge, not a barrier, to financial inclusion and economic participation.
After all, European competitiveness is not just about outperforming other global players. It is about ensuring that all 450 million European citizens can participate in and benefit from our shared economic success. That is the kind of competitiveness worth striving for.
