News item | 16-03-2023 | 4:47 pm
The financial sector plays an important social role and influences our society in countless ways. Paying for the groceries, the monthly payment of your mortgage and the declaration of your healthcare costs. There are few services that so many people and companies use. We live in uncertain times; it is important to remain constantly alert to new developments that could affect the financial sector.
In the policy agenda for the financial sector, Minister Kaag gives direction to her policy for the coming years along four ambitions.
The financial sector is facing major transitions. The sector must face challenges related to sustainability, inclusiveness and digitalisation. To this end, financial institutions must first and foremost be healthy and resilient. Citizens and businesses must be able to count on a service-oriented, accessible and reliable financial sector. At the same time, the right framework conditions must be created so that the sector can meet these challenges.
Sustainable economy
The Netherlands is taking a pioneering role in making the financial markets more sustainable. With the national climate commitment in 2019, the sector has shown that it wants to take responsibility, and good steps have been taken since then. An acceleration of the climate transition is needed and we are therefore exploring how possible legislation can support the sector’s initiative.
Minister Kaag: “Making the financial sector more sustainable is one of my main priorities as a minister, because I believe that this can serve as a flywheel for the green transition that is so badly needed. Banks can finance a green future and help companies make the sustainable transition.”
Minister Kaag writes in her policy agenda that financial institutions are asked to bring their balance sheets in line with the 1.5 degree scenario and the ambitions of the cabinet. By encouraging companies to opt for green investments and investments that make the energy transition possible. Insurers must be better prepared for the damage resulting from climate change, such as floods or prolonged drought. Greenwashing (pretending to be greener than you are) must be countered by providing more insight into what are actually green projects and what are not.
Healthy and resilient
What is needed for a healthy and resilient financial sector changes over time. Tightening of the rules after the financial crisis in 2008, for example, has made the Dutch and European financial sector safer. The turbulence in the financial markets last week shows once again how important this is. The corona crisis has shown that a resilient financial sector can help to cope with the economic consequences of a crisis. In her policy agenda, Minister Kaag writes that we must now focus on strengthening the European capital markets union and must be alert to new risks such as cyber attacks.
Social responsibility and inclusiveness
The financial sector is digitizing at a rapid pace; payments often take place online, cryptos have made their appearance and new technologies such as artificial intelligence are being used more often. It is important that everyone can continue to participate. And there is work to be done there: recent research by DNB showed that 1 in 6 people have difficulty performing banking and payment services independently. This means that the payment system must remain easily accessible to everyone. It also means that cash must remain available.
Digitization provides more convenience, but also has a dark side. For example, many people fall victim to phishing and spoofing in which criminals try to gain access to bank accounts. We counteract these dark sides by acting in a normative manner. It is also important to make people financially resilient, and that starts very early – with financial education at school. From the perspective of behavioral science, we also look very precisely at how people make financial choices and how we can help them with this.
Innovative and ready for the future
With these measures, the financial sector can face the future in a resilient and robust way. By embracing new innovations that are in the interest of the customer. By having and keeping a good overview of what is happening in the FinTech world. And by taking a close look at new developments such as the crypto market and the digital euro.
In this way we maintain a stable and innovative sector that is ready for a green future, but also keeps an eye on the vulnerable citizen.