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The European Union’s Digital Agenda

What is it?

The European Commission (EC) wants to make the European Union (EU) fit for the digital age and to create an economy that works for people, alongside its other political priorities. The EC is pursuing its digital and economic/finance related priorities through various strategies.

The EC has continued to develop the path to achieving what it refers to as Europe’s digital decade, including a set of digital rights and principles to ensure EU citizens are ‘empowered to fully enjoy the opportunities that the digital decade brings’ and new laws on digital markets, digital services and digital identity.

The EC has also launched strategies covering finance, data and artificial intelligence, and cybersecurity, and proposed various new laws and made updates to other strategies including its industry strategy. Various aspects of the EC’s digital agenda, including its finance, data, artificial intelligence and cybersecurity strategies are of particular relevance to financial services entities.

The key elements of the EU’s digital agenda applicable to financial services entities

Several of the EC’s strategies and proposals for new laws and regulations under its overarching digital agenda are applicable to financial services entities. The EC’s digital finance strategy is of particular relevance, including new laws covering markets in crypto assets and digital operational resilience. Furthermore, given the widespread use of big data and the growing use of artificial intelligence (AI), the EC’s data strategy and Artificial Intelligence Strategy (AI strategy) is of also of relevance to financial services entities, as is the EC’s cybersecurity strategy. Financial services entities which interact with retail investors may benefit from the development of initiatives such as the EU digital identity, for instance to support AML and know your customer (KYC) checks.

Digital Finance Package

The EC’s digital finance package was published on 24 September 2020 and included a digital finance strategy with the following objectives:

  • A digital single market for financial services;

  • A European financial data space to promote data-driven innovation;

  • A regulatory framework facilitating innovation;

  • Addressing the risks of digital transformation.

Alongside the digital finance strategy, the EC also published legislative proposals including a regulation on markets in crypto assets, a pilot regime for distributed ledger technology and a framework for digital operational resilience, all of which have now been adopted into law.

Data Strategy

Through its data strategy, the EC is seeking to create a single market for data with improved data flows, privacy and data protection and fair, practical and clear rules for the assessment and use of data. The data strategy seeks to further aspects of the EC’s digital rights and principles for citizens, but also has consequences for financial services entities such as through the development of the Data Act.

The Data Act is seeking to make more data available for firms, citizens and public administrations by increasing legal certainty for the use and transfer of data, including by addressing contractual imbalances. Negotiations on the Data Act among the EU co-legislators are ongoing and are considering a broad set of requirements for data sharing including through smart contracts – a key component of decentralised finance – which may have more direct implications for the finance sector.

Artificial Intelligence Strategy

Through its AI strategy, the EC is seeking to enable firms and citizens to benefit from AI while feeling safe and protected. In April 2021, the EC published a communication on fostering a European approach to AI and proposed a new AI Act containing harmonised rules on AI. The European co-legislators are negotiating the AI Act which is likely to contain a framework for categorising AI by risk and requirements on governance and transparency. EU and US authorities have raised concerns about the operation of AI programmes such as ChatGPT, including the potential for data breaches and the lack of accountability.

Given the growing use of artificial intelligence (AI) by the financial sector, in various contexts, the development of the EU’s approach to AI will have implications.

EU Digital Identity

The EC is developing a European Digital Identity framework that EU citizens and residents will be able to use through a personal digital wallet to identify themselves or provide confirmation of certain personal information to access online and offline public and private services across the EU. The EC’s intention is for the European Digital Identity (eID) to enable users to provide identity documents stored in their digital wallet to a firm such as a fund manager to access services including subscribing to an investment fund.

The European Digital Identity coupled with other initiatives such as the Regulation on electronic identification and trust services holds the potential to revolutionise various aspects of the identity verification process that for example funds undertake for AML and KYC purposes. European co-legislators have just reached agreement on the eID legislation, with eID's scheduled to be rolled out to all EU citizens in 2025.


The EC has set a target of realising its digital decade policy programme by 2030. It plans to review the targets it has set by 2026 to take stock of technological, economic and societal developments. and the progress made on implementing the various initiatives e.g., the EU Digital Identity in 2025.