The European Commission (EC) has unveiled its Action Plan on how to harness the opportunities presented by technology-enabled innovation in financial services (FinTech).

Part of the EC’s efforts to build a Capital Markets Union (CMU) as well as to create a Digital Single Market, the action plan seeks to enable thefinancial sector to make use of the rapid advances in new technologies, such as blockchain, artificial intelligence and cloud services. It sets out 23 steps to enable innovative business models to scale up, support the uptake of new technologies, increase cybersecurity and the integrity of the financial system.

The action plan includes hosting an EU FinTech Laboratory where European and national authorities will engage with tech providers in a neutral, non-commercial space.

Earlier this year, the EC established an EU Blockchain Observatory and Forum to boost blockchain activities in the region. It said that it is working on a comprehensive strategy on distributed ledger technology and blockchain addressing all sectors of the economy.

In addition, it will report on the challenges and opportunities of crypto assets later this year.

"Digital technologies have an impact on our whole economy – citizens and businesses alike. Technologies like blockchain can be game changers for financial services and beyond. We need to build an enabling framework to let innovation flourish, while managing risks and protecting consumers,” Mariya Gabriel, Commissioner for the Digital Economy and Society said.

Furthermore, the EC will present a blueprint with best practices on regulatory sandboxes, based on guidance from European Supervisory Authorities.