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Technology

 Cannot read this email? Open in your browser.February 2020 
 

Technology Update

February 2020

 
 
 
 

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Our Tech Hub gathers our members' work on technology. Get in touch with us to share best practices.

 
 
 
 

Highlights

 
 
 
 
  • Independent assurance on the European Single Electronic Format
  • Ambitious EU digital agenda – the Commission issues its 2020 Work Programme
  • 30 Recommendations to the EC on regulation, innovation and finance by the expert group on regulatory obstacles to financial innovation
  • The Commission launches a consultation on EU regulatory framework for crypto-assets
  • The Commission seeks views on improving financial services resilience against cyberattacks
  • World Economic Forum announces Global Consortium for Digital Currency Governance
 
 
 
 
 

Feature story

 
 
 
 

Independent assurance on the European Single Electronic Format

The European Single Electronic Format (ESEF) will become effective as of 2020. This is a significant step forward for the accessibility and comparability of the financial information of the issuers on EU regulated markets. It is now up to each EU Member State to develop the implementation of ESEF and to maximise the benefits digitalisation can offer.

This paper has been prepared by Accountancy Europe together with the European Contact Group (ECG) as a contribution to ESEF implementation efforts. Investor protection and public interest have been the overarching principles applied while drafting this document. It sets outs specific considerations along with practical implications which may assist auditors in their role to provide an assurance conclusion in connection with ESEF.

 
 
 
 
 

EU Developments

 
 
 
 

Ambitious EU digital agenda – the Commission issues its 2020 Work Programme

On 29 January 2020, the European Commission has put forward an ambitious digital agenda to ensure Europe is ‘fit for the digital age’.

Among the key planned initiatives we should expect in 2020 are European Data Strategy, White Paper on Artificial Intelligence, a new Digital Services Act, a review the Directive on Security of Network and Information Systems (NIS Directive), a Proposal on Crypto Assets. Read more

Commissioners discuss Artificial Intelligence and Data Strategy

Commissioners Margrethe Vestager and Thierry Breton discussed their plans on 5G, AI, data strategy, the digital services act and cybersecurity before European Parliament on 27 and 28 January.

Data strategy goes hand in hand with AI according to Commissioner Breton and the focus will be upstream – “on the nature of the data that feeds an algorithm”.

The European Commission is expected to present a European strategy on artificial intelligence on 19 February.

30 Recommendations to the EC on regulation, innovation and finance by the expert group on regulatory obstacles to financial innovation

On 13 December 2019, an expert group set up by the European Commission to identify regulatory obstacles to financial innovation, presented its report putting forward 30 recommendations how to create a framework able to accommodate FinTech innovation.

The recommendations focus on the innovative use of technology in finance, maintaining a level playing field, access to data, and the financial inclusion and ethical use of data.

The group considered how to ensure financial stability, financial integrity, and consumer and investor protection in light of the new opportunities and risks which come with FinTech. Read more

The Commission launches a consultation on EU regulatory framework for crypto-assets

The European Commission has launched a public consultation seeking views on the EU regulatory framework for crypto-assets.

Currently, there is no commonly accepted way to classify crypto-assets at the EU level. This makes it difficult for market participants to understand the obligations they are subject to. Categorisation of crypto-assets is a key to determine whether they fall within the perimeter of EU financial services legislation.

The consultation looks into (among others) anti-money laundering risks of crypto-assets that currently fall outside the scope of the EU legislation. For example, some stablecoins may not be covered by the EU regulation. Question 25 makes a reference to “periodic independent auditing of the assets or funds held in the reserve” as a possible requirement that could be imposed on the issuers of “stablecoins” and “global stablecoins” to tackle their respective risks.

The EC particularly welcomes views from Member States, national competent authorities, market participants from the crypto-asset sector and from the financial services sector, EU businesses and others. The deadline for comments is 19 March 2020. Read more

The Commission seeks views on improving financial services resilience against cyberattacks

In parallel with its consultation on crypto-assets, the Commission has launched a public consultation on a potential initiative on the digital operational resilience in the area of financial services.

The aim is to gather stakeholders’ views on the need for legislative improvements within the financial services legislation with a view of making the financial sector more secure and resilient.

In its mapping of relevant stakeholders, the Commission identified industry, business associations, SMEs, financial services providers including audit firms. The deadline for comments is 19 March 2020. Read more

EBA issues Report on big data and advanced analytics

On 13 January European Banking Authority (EBA) has issued a report looking into the use of big data (BD) and advanced analytics (AA) in the banking sector. Financial institutions are keen on adopting BD&AA because they can improve efficiency, productivity and cost saving and create new business opportunities.

In its report, EBA has identified four key pillars – data management, technological infrastructure, organisation and governance and analytics methodology – necessary for the successful adoption advanced analytics along with a set of ‘elements of trust’: ethics, explainability and interpretability, fairness and avoidance of bias, traceability and auditability, data protection and quality, security and consumer protection. Read more

 
 
 
 
 

International Developments

 
 
 
 

World Economic Forum announces Global Consortium for Digital Currency Governance

On 24 January, the World Economic Forum (WEF) has announced the creation of the Global Consortium for Digital Currency Governance to define a regulatory framework for cryptocurrencies, including stablecoins.

Good governance is essential to realising the full potential of digital currencies and the consortium will focus on solutions to a fragmented regulatory system. They will work towards innovative regulatory approaches aiming to design ‘a set of guiding principles’ that would support public and private actors in the digital currencies area.

The initiative will bring together international enterprises, financial institutions, government representatives, technical experts, academics, international organisations, NGOs and members of the WEF’s communities. Read more

 
 
 
 
 

National Developments

 
 
 
 

ACCA report: Economic crime in a digital age

The recent ACCA report is looking into the role of technology in financial crime. New technologies present new business opportunities, but they have also opened new opportunities for financial crime. The report views financial crime as an abuse of trust and this is where professional accountants can make a difference.

ACCA report: Future ready: accountancy careers in the 2020

The report suggests there is a growing opportunity for the profession to contribute to building sustainable and purposeful organisations. It identifies a number of ‘career zones’ of opportunity where accountants can play a key role in supporting these ambitions.

ICAEW and ISCA report: Digital transformation in finance functions: ASEAN and UK perspectives

This report shares the practical experience of professional accountants in business and other experts who are leading or involved in digital transformation of finance functions in companies across the Association of Southeast Asian Nations (ASEAN) region and in the United Kingdom (UK).

 
 
 
 
 

Other news

 
 
European Commission
 
Crypto-assets
 
IFAC
 
Key Factors in Evaluating Software Investment
 
IFAC
 
Re-imagining the Future Accountant—Our Call to Action
 
IFAC
 
Cybersecurity Is Critical for all Organizations – Large and Small
 
AICPA
 
Blockchain Technology and Its Potential Impact on the Audit and Assurance Profession
 
EU2019.FI
 
Finland offers free online courses in all EU languages on artificial intelligence
 
Bruegel
 
The next generation of digital currencies: in search of stability
 
Bruegel
 
Europe’s banking union must be cyberproofed
 
Bruegel
 
Libra as a currency board: are the risks too great?
 
 
 

Events

 
 
27/02/2020
 
2020 Technology conference - Taking stock: to where from here? (CAI)
 

This curated content was brought to you by Iryna de Smedt, Accountancy Europe policy advisor since 2009. You can send her tips by email and connect with her on LinkedIn.

 
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