Law on financial marketplace can be adopted in Russia in June

Marketplace law: finally

Russian Business Week, which was cancelled in March, anyway was launched on Zoom. Head of the Russian Union of Industrialists and Entrepreneurs Aleksandr Shokhin opened the first session of the forum online on 21 May, which was expectedly dedicated to the topic of anti-crisis money and financial policy. The management of the Russian Union of Industrialists and Entrepreneurs, First Vice Chairman of the Central Bank Sergey Shvetsov, head of Moscow Exchange Yury Denisov, executives of the banking sector and the National Rating Agency had a direct dialogue with the business community.

Head of the Duma’s Committee for Financial Market Anatoly Aksakov set the discussion an unexpected trend. He told the audience that a law on marketplace of financial services would soon be adopted.

“The bill on marketplace is an opportunity to use electronic platforms to obtain financial services,” he reminded the audience. “Here we have made great progress. I have talked with the State Duma’s Vice Speaker Gryzlov today and asked him to assume the mission to polish and improve its appearance. And if we work well, the law can be adopted in June. Our citizens will be able to receive a wide range of services. We have been waiting for this law for long, and it is necessary to launch it faster.”

CB is ready to go

In December 2071, the CB already began working on the project Marketplace for online retail sale of financial services and online registration of financial deals around the clock. It was planned to unite banks and insurance agencies whose financial products a consumer can compare and choose. It is also supposed that the platform developed by the CB will provide non-financial services allowing all operations with real estate (purchase and sale, leasing a dwelling, property assessment, repair, designer’s services, purchase of furniture, cleaning services). The fully-fledged launch of the platform within Marketplace project, as the CB’s website reads, will become after adopted legislative changes come into force. It was said in March it would launch in 2020.

As it is known, the project of the bill on electronic platform for banking and insurance services was adopted at the first reading in June 2019. According to its text, the marketplace must enable citizens to choose the best loan terms as a kind of supermarket of financial services.

“The key statement is that the marketplaces that exist now must keep operating, nobody must switch them off. And the one that will run on the legal basis will be on the roster of the Bank of Russia, it should have “carrots” that will stimulate a client to work with this marketplace,” Aksakov explained in February.

The new law will define the legal bases of activity of electronic platform operators and regulate relationships to seal deals with banks with the help of information technologies. Debates on the bill have been lasting since 2017.

CB: “Big banks are afraid of this project”

Moderator of the financial session Oleg Goschansky, board chairman of KMPG consultancy, continued the topic of the virus and asked the representative of the CB what the regulator thought about banks’ earning on other different financial services on electronic platforms.

Shvetsov clearly outlined the priority: “We support the development of the competition in the banking sector”.

“I think that every our action to develop the banking business must be sieved by competition. The creation of ecosystems is a network effect, it is a switch of the consumer from one group to another. Simultaneously with the development of ecosystems, we should make strict and clear decisions that would lift restrictions on switching from one provider of a service to another. And the marketplace, of course, is one of such projects. And, of course, big banks are afraid of this project, they think that easy switch of the consumer from a provider to another will reduce their effectiveness,” he explained.

According to him, the CB will consecutively follow the competition in the market of banking services.

However, some specialists previously expressed the opposite opinion. For instance, Expert RA thinks that the creation of the marketplace planned by the Bank of Russia will provoke an outflow from small regional banks to bigger ones as a result of unequal pricing competition.

Security workers against upload of biometric data by borrower

At the same time, head of the Duma’s Committee for Financial Market Anatoly Aksakov expressed the readiness to lift and dramatically change the resolution of the bill on biometry, which permitted the borrower to add personal data to the biometric system on his own. So financial services for a bank’s borrower became cheaper. According to Aksakov, now a bank introduced a client’s biometric data to the system, while the possibility of free access was criticised by security workers. Law enforcement agencies saw a risk of fraud in free access. “It is possible that we will revoke or will introduce the project again,” Aksakov promised.

According to his data, the share of digital shares during the pandemic has increased from 25% to 48-50%. He forecasts that after the restrictions are lifted, digital services will still be in demand, though retail lending isn’t having the best times following European experience — car loans and consumer lending have decreased there too.