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VIXIO’s impact index rose 15 points in June from the revised May figure of 104 to 119, above the 2022 baseline and 2 points higher than June 2022.
In June, there was a steady rise in global regulatory impact from the past few months, helped by a 16 percent month-on-month increase in regulatory activity, with a large portion of actionable and indicative events helping to push up global impact. However, although activity rose in June, this is not expected to last as July and August have previously been times of low regulatory change, particularly in Europe.
In the rankings, the UK, EU and Australia remained the three most active jurisdictions for 2023 to date, as previously expected. Australia recorded 23 events in June, the majority of which were secondary phases to reforms the new Labour government is pursuing.
Other countries such as Brazil have been more active this year than in 2022, with 70 percent of regulatory events in 2023 being actionable. This is due to the way the Brazilian regulators function as it is common for the Brazilian central bank to issue resolutions rather than issue consultations as is more common in Europe. For example, in the last few years, only four consultations have been published in Brazil.
Revising PSD2
Despite the UK continuing to be by far the most active jurisdiction in 2023, the EU released several significant regulatory proposals in June, namely the payments services package and the single currency package.
The EU has billed this as an “evolution”, rather than a “revolution”, with changes to a number of payments rules spanning a wide scope. This includes: fraud, open banking, open finance, physical and digital cash, levelling the playing field between banks and non-bank firms, simplification where applicable, and harmonisation of most rules throughout the EU with a new regulation. This is close to what VIXIO forecasted in 2022.
In multiple cases, the changes come from past debates between banking and payments industry stakeholders, as well as consumer interest groups, with the EU attempting to broker compromise positions between everyone.
For example, data holders will now be able to charge commercial data users for reasonable compensation in the open finance framework (excluding payments), to cover the costs of infrastructure building and maintenance.
This aligns to a response from the Swedish Bankers Association during the review of the revised Payment Services Directive (PSD2), which argued that PSD2 had led to “large and unexpected” costs for its members. The EU recognised that open banking was “perceived as a pure regulatory burden” for banks, and has attempted to rectify this issue for open finance.
At the same time, the European Commission has removed some of the barriers for open banking providers (data users). This includes requiring data holders, usually banks, to host a dedicated interface and for data users to be able to use an alternative interface as long as the national authority does not object. Data users can additionally claim damages against the bank for lost business.
If you enjoy reading our monthly impact series, why not create your own personalised activity and impact dashboards with our Horizon Scanning platform.
Methodology
VIXIO Regulatory Impact Index combines the volume of regulatory events with a weighted classification, according to informative (1), indicative (2) and actionable (3). In February 2023, the Impact Index was rebased, so the average impact score of 2022 was equal to 100.
