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Home , Bank of Slovenia, BPER Banca, Euro Banking Association

CONTENT

AN INTRODUCTION BY THE CHAIRMAN ...... 4

AN INTRODUCTION BY THE SECRETARY GENERAL...... 7

1 REPORT ON EBA ACTIVITIES IN 2019 AND OUTLOOK FOR 2020+...... 12

1.1 REPORT ON WORK STREAMS IN 2019...... 12

1.2 GOVERNANCE REVIEW...... 24

1.3 MARKETING AND COMMUNICATIONS...... 24

1.4 CHANGES IN THE BOARD OF THE ASSOCIATION...... 26

1.5 CHANGES IN EBA MEMBERSHIP ...... 27

BOARD OF THE BANKING ASSOCIATION...... 28

1.6 OUTLOOK FOR 2020+...... 30

2 FINANCIAL SITUATION, P&L STATEMENT AS AT 31 DECEMBER 2019...... 38

2.1 OVERALL EXPENSES INCURRED IN 2019 ...... 38

2.2 REVENUES IN 2019...... 38

2.3 INCOME TAX AND RESULTS FOR 2019 ...... 40

2.4 EBA BUDGET FOR 2020 ...... 42

2.5 PROJECTED REVENUES FOR 2020...... 44

APPENDIX 1 ...... 46

APPENDIX 2...... 46

2 REPORT OF THE BOARD 2019 3 AN INTRODUCTION BY THE CHAIRMAN

Reporting on the EBA’s achievements in 2019 is In our Market Practices and Regulatory not an easy task these days. Every one of us is Guidance stream, both SMART2 and the Expert busy coming to terms with the unprecedented Group on Payment Fraud-related Matters, events that hit the world in early 2020 and kicked off in early March 2020, stepped up continue to impact our professional and their meeting frequency during the COVID-19 personal lives. The only thing that seems to be lockdown period. A note on the benefits of a even more inconceivable than taking the time pan-European approach for an optional fraud to write this report is to sit down and read it. information field in instant payment processing After all, what is there to learn from a document has recently been finalised by the SMART2 reporting on what appear to be achievements fraud experts and sent to our members for from what feels like a long-ago era? endorsement. Work has also advanced on the set-up of a group on KYC harmonisation I believe there actually is a lot to be learnt by topics as well as on preparations, with a small turning back our attention on 2019. But we sounding group, for activities supporting the should take this look back while keeping the ‘migration of minds’ by both the supply and The continued high engagement levels of our to implement the necessary changes. Project current crisis in mind. This crisis could serve the demand side to the future request to pay members in the work streams we have already resources and investment capabilities were as a measuring stick for the assessment of our instrument. kicked off based on this input should probably already scarce prior to this crisis. The current activities and achievements. We should use not come as a surprise: they all relate to areas economic outlook and the continued partial it as a magnifying glass that helps us evolve Let me take this opportunity to thank the close in which industry players and stakeholders lockdown and social distancing measures are those of our activities that make a difference to 250 experts in our different workstreams for will need to further strengthen collaboration not expected to improve this situation. That is for our members, that matter to the European their continued commitment and contribution. in order to ensure the necessary levels of why first re-assessments and re-adjustments payments ecosystem in the long run or that are harmonisation and integration for a fully of pre-COVID-19 project plans are already so fundamental that their reinvention for the Their relentless progress throughout the height digitalised, innovative and resilient European ongoing in many organisations. new COVID-19 reality will be worth the effort. of the lockdown seems to confirm the course payments ecosystem. taken by the Association in 2019 in preparing This is where our 2019 stock-taking exercise Based on this approach, we have already its value proposition for 2020. In particular, The speed of the digital transformation and comes in. Any decisions adjusting the reached a few early conclusions while revisiting this progress testifies to the great benefit of integration across the European payments planning for the future, and for the new digital 2019 from our current perspective. Most the extensive consultation process with our industry was already increasing prior to the reality it holds, should ideally be based on a importantly, we have been very pleased to members on their top priorities for the agenda start of the COVID-19 pandemic. There is no comprehensive overview of the opportunities register an unbroken interest over the past of the Association, which took place in Q4 doubt that it will further accelerate in light and challenges facing the industry. Through couple of months in the activities we had 2019 and shaped our value proposition. In this of the rise in e-commerce transactions and information papers, market practice kicked off in early 2020 in line with our value consultation, our members had pushed for contactless payment instruments fuelled by the recommendations, educational seminars proposition. a further branching out of the Association’s pandemic and related preventive measures, and the many discussions and exchanges activities into areas supporting the quality of which have also further exposed and increased fostered at EBAday and other events, the Euro On the Thought Leadership and Innovation payment services and related value-added the general need for secure ways to carry out Banking Association delivers comprehensive side, the Open Banking Working Group and offerings, such as liquidity management, fraud all kinds of business and other transactions in a industry insights that are well-suited to support the Liquidity Management Working Group have prevention and detection, cyber security, KYC digital way. its members in their own stock-taking and remained fully on track in their exploration of processes, ecosystem considerations around decision-making activities. The information digital trust and data analytics, respectively, request to pay and ISO 20022 or matters What is more difficult to assess at this stage papers, which are available to all our members while the newly created Cryptotechnologies, pertaining to e-identity and digital trust. is the impact that the new pandemic and its on the EBA website, are particularly relevant Smart Payments, and Stablecoin Working many consequences will have on the abilities in this context, since they detail the collective Group has started to dig into the highly topical of the different actors to forcefully engage in findings of our working groups on innovation subject of stablecoins. the collaborative and individual efforts required topics.

4 REPORT OF THE BOARD 2019 5 AN INTRODUCTION BY THE SECRETARY GENERAL

Do you still remember the times when payment service providers to being a mere commodity. professionals generally agreed that “a payment On the other hand, payments today are seen is a payment is a payment,” meaning that as an important point of interaction between there really was not much more to a payment end-users and the providers that serve them. than, well, a payment? I recall these times and discussions in the run-up to SEPA very well. As a matter of fact, payments are considered They were marked by huge collaborative efforts as a key trigger for other, value-added aimed at defining and agreeing on a common interactions. While it may be true that the technical standard, new semantics and market payment account is the starting point for many The present Board report is aimed at giving As many other organisations, we are currently rules enabling payment service providers customer services, the actual trigger for many orientation and updates on these Association struggling with the temporary stop that COVID- across all of Europe to efficiently move money of the 240 touchpoints per year between the deliverables as well as on the insights they 19 has put on many face-to-face interactions. from one payment account to the next all customer and its PSP is a payment. Against provide – as are the newly introduced Board To this effect, we have replaced our annual across the continent. This major industry this background, it is crucial for PSPs to take synopsis, our newsletters, fact sheets and general meeting with a mail vote process in initiative was mainly driven by infrastructure advantage of these interactions in order to webinars as well as our different community combination with a virtual information session considerations and strictly limited to the inter- better understand the needs of their customer gatherings, such as the EBA roadshow and have postponed our EBAday conference. PSP space. and shape services meeting these needs, as sessions or our country group meetings. We will keep exploring other channels and McKinsey argued in a 2016 report labelled additional ways of keeping our community Even half a decade later, a conceptual “From touchpoints to journeys: Seeing the Over the past few years, we have focussed connected and engaged. A first EBAday Online framework such as the Euro Banking world as customers do”. on growing our EBA member community webcast in the run-up to the next physical Association’s Digital Customer Services by extending full membership rights to any event recently attracted an impressive almost Interface (DCSI), which identified and A focus on designing customer journeys member and opening membership to 700 participants. suggested bridging the gap between around account-related data may, for instance, organisations from OECD member states. offerings in the end-user services layer and lead to value-added services such as a bank- In closing, let me express the hope that the the infrastructure layer, was noted with great backed digital identity that can be used for all At the same time, we have also multiplied ongoing search for ways to overcome the interest but did not trigger any collective kinds of business interactions, solutions for our touchpoints and channels of interaction current limitations in many areas will pave the action. As a result, the end-to-end payment digital consent management or even simple with our members and key stakeholders to way for more, rather than less, pan-European process at a pan-European level remained electronic file vaults. Liquidity forecasts or any strengthen the relationships and dialogue within co-operation and harmonisation in payments. split into two sets of disconnected activities: other data-related analytics services are other the membership and the wider ecosystem. Together with our Secretary General and the the infrastructure processing layer and the examples of valuable offerings closely linked These combined efforts have helped to foster whole EBA team, my fellow Board members end-user services layer. With no middle piece to a payment account. As these examples a broad and thriving community of EU-based and I look forward to contributing to this enhancing the interaction between the two show, payments are not only valued as points and international payments organisations journey towards a better payments future with layers and supporting the proliferation of of interaction. They are also considered as and practitioners with a keen interest in the the support of our member community – and innovative SEPA-wide customer solutions, valuable information repositories in their own European payments market. with a decidedly pan-European vision and a SEPA payment indeed remained a mere right. agenda in our pockets. payment. Services such as those mentioned above Where do we stand today, more than 10 rely on the implementation and use of state- years after the implementation of SEPA? Are of-the-art technology. API-based access to Wolfgang Ehrmann we still talking about payments in the same bank account information by third parties that way as we did at the time? Definitely not. The the end-customer trusts, the implementation picture has become much more complex. On of artificial intelligence to detect and, where the one hand, the great majority of payments possible, prevent fraud, the use of distributed has moved from being a service by payment ledger technology to implement micro-payment

6 REPORT OF THE BOARD 2019 7 to e-invoicing or e-commerce. The EBA The European payments industry has come is planning to support this evolution by a long way since the carving out of the SEPA bringing together demand and supply side rules and the rather confined mandate related actors for discussions on relevant use case to this. As market actors are striving to address considerations. the persisting “front-end fragmentation and provide a competitive pan-European At the same time, there is a growing solution that meets the needs of European recognition that more co-operation and users and exploits the benefits of the Single harmonisation is required in other areas to Market” 1 with the blessing of European ensure smooth and fully automated end-to- authorities, the EBA is eager to contribute to end processes and a consistent and positive these developments through pan-European customer experience. One example is the need collaborative activities supporting the creation for more standardisation around application of a highly integrated and future-proof pan- programming interfaces to limit implementation European payments ecosystem. The EBA will efforts in connecting different corporate, PSP be pleased, through its activities related to and third-party applications to each other. the shaping of such a payment ecosystem, to provide value for the realisation of an integrated Several initiatives are currently looking into EU Payments Market. We look forward to practical ways to strengthen co-operation continuing this journey together with our broad on fraud prevention and detection at a pan- and multi-faceted membership for the benefit European level. The EBA-facilitated SCT Inst of their customers and the wider European solutions in an Internet-of-Things environment developments may create new business Migration Action Round Table (SMART2) is economy. or KYC requirements are examples where opportunities for payment service providers, promoting the sharing of relevant contextual existing or emerging technologies may such as smart payments in an Internet-of- data between PSPs via an optional SCT Inst efficiently support or even trigger compelling Things environment or the impact of instant fraud information field while the EBA Expert value propositions. payments on corporate intra-day liquidity Group on Payment Fraud-related matters is management. evaluating how a broader exchange of fraud- In close cooperation with its members, the related intelligence and data among AS-PSPs Thomas Egner EBA follows and analyses trends in technology, Thanks to the large-scale real-time capabilities could be facilitated at a pan-European level. linking them to market developments, that instant payment processing and reporting describing potential fields of application and requirements introduced across the industry, helping members to assess their value and progress is now also underway in the end-to- relevance. Dealing with various aspects of end payment space. A pan-European request Open Banking over the past few years, our to pay scheme is currently being developed by Open Banking Working Group has zoomed the European Payments Council. In parallel, in on data opportunities in particular. Its a pan-European messaging infrastructure 2019 publication explores the possibilities of layer is being put in place by EBA CLEARING co-operation when using artificial intelligence in to help bridge the gap between the payment data sharing and control processes. infrastructure layer and the end-user services layer. Across Europe, PSPs are assessing Our Thought Leadership and Innovation work the innovation potential these new collective 1 “Innovation and its impact on the European retail payment landscape,” Note by the ECB for the Economic and Financial Affairs stream has also delved into other areas where developments hold for new or enhanced Council (4 December 2019): https://www.ecb.europa.eu/pub/pdf/other/ecb.other191204~f6a84c14a7.en.pdf (accessed on 20 digitalisation and forward-looking industry customer journeys, for instance in relation May 2020).

8 REPORT OF THE BOARD 2019 9 CORE ACTIVITIES

To provide To provide To organise training & To advance the guidance events fostering educational understanding of new on practical pan-European services on key market trends implementation practitioner industry topics

WHY? WHY? issues WHY? exchange WHY? to the EBA community

Open Banking WG Summer and PSD2 Practitioners’ Panel Winter Schools Cryptotechnologies and EBAday Smart Payments WG SCT Inst Migration Global Seminars Action Round Table EBAday Business Fora Liquidity Mgt. WG (SMART2) EBA Liquidity Local EBA Roadshow Management Open Forum on Open Cyber Regulation Sessions Training Seminars

HOW? Banking and Digital HOW? Sounding Board HOW? HOW? Transformation Webinars

10 REPORT OF THE BOARD 2019 11 1 REPORT ON EBA ACTIVITIES IN 2019 AND OUTLOOK FOR 2020+

1.1 REPORT ON WORK STREAMS IN 2019 THOUGHT LEADERSHIP AND INNOVATION Thanks to the commitment and contribution of the EBA community in 2019, the Association was in a position to take forward and further develop all work streams in its four key activity areas, resulting in the following key deliverables: 1.1.1 OPEN BANKING WORKING GROUP

THOUGHT LEADERSHIP & INNOVATION: NETWORKING & EVENTS In 2019, the EBA Open Banking Working PUBLICATIONS AND EVENTS Group focused its activities on studying Ξ EBAday 2019: “Accelerating digital the collaborative opportunities in Artificial Ξ Open Banking Working Group: "Artificial transformation in payments” Intelligence (AI) in the context of Open Banking. Intelligence in the era of Open Banking" Ξ EBA Roadshow in Portugal and Spain AI has the potential to revolutionise the Ξ Cryptotechnologies and Smart Payments Ξ Three EBAday Business Fora financial services sector: due to its capabilities Working Group: “The Internet of Things and of automated and autonomous decision- Smart Payments” making, AI opens up new ways of value TRAINING & EDUCATION: SEMINARS Ξ Liquidity Management Working Group: creation based on data sharing. “How can harness technology Ξ EBA Liquidity Management Training Against this background, the group started to for the benefit of the corporate liquidity Seminar: “Managing corporate liquidity in assess the potential of AI-supported analytics management ecosystem” and “Impact changing and disruptive times” of instant payment and intraday liquidity for several non-competitive use cases, where Ξ EBA Summer School: “The Invisible on the corporate liquidity management it may help to increase efficiency and resilience Payment” ecosystem” for the benefit of the overall ecosystem. The Ξ EBA Global Seminar: “Real-time payments results of this work were published in a paper Ξ Open Forum on Open Banking and Digital and Open Banking: New realities, new on "Artificial Intelligence in the era of Open Transformation: “Open Banking – beyond challenges”. This seminar was the third of Banking" in June 2019. compliance: bridging the gap between its kind and took place in London in the legacy systems and the API future” and week prior to Sibos. In September 2019, the working group “Moving forward on the digital journey – identified digital trust as the next topic to be which payment methods will win the hearts Ξ EBA Winter School: “The payment after researched. Subsequently, the working group and minds of the customers? Will we still tomorrow: creating value for the customer further defined the scope of the report with need cash...?” of the future” the goal to define what trust in a digital world means and to elaborate on different concepts MARKET PRACTICES & REGULATORY The following sub-sections will provide a of trust such as institutional and infrastructure GUIDANCE: PUBLICATIONS detailed overview of the work programme taken trust. Preliminary research revealed that forward within the EBA’s four activity streams digital trust is not just about technology, but Ξ SMART2: “Best practices to support PSPs and other areas in 2019. also about operations/processes, people, in detecting/combatting fraud and scam” propositions/offerings and communication. Ξ PSD2 Panel and SMART2: For the planned report, the working group “Recommendation on fraud reporting narrowed the focus on analysing how banks consolidation” can serve as custodians of trust in an Open Ξ PSD2 Panel and SMART2: “How to report Banking and digital world and leverage their e-money transactions under the EBA Fraud digital trust assets for a value proposition to Reporting Guidelines. Open questions their customers. around e-money definition”

12 REPORT OF THE BOARD 2019 13 1.1.3 LIQUIDITY MANAGEMENT WORKING GROUP

1.1.2 CRYPTOTECHNOLOGIES AND In 2019, the Liquidity Management Working SMART PAYMENTS WORKING Group (LMWG) completed its second phase GROUP of research. The group explored how recent and emerging technologies and related Considering the increasing significance of changes already impact day-to-day activities in the Internet of Things (IoT) and its expected corporate liquidity management and how they impact on the financial sector, the EBA could support them in the future. Technology Board, in 2019, extended the mandate of already provides operational efficiencies and the EBA Cryptotechnologies Working Group benefits both for the bank and the corporate to exploring smart payments. To reflect this side of the liquidity management ecosystem. new focus, the working group was renamed And in the future, corporate reliance on Cryptotechnologies and Smart Payments technology is likely to increase across the Working Group. whole range of liquidity management tasks.

The working group started by reviewing The LMWG publication resulting from this work the development of the Internet of Things discussed the corporate liquidity management and assessed how payment services need ecosystem, starting at core interdependencies to evolve in an IoT world. It then looked at between banks and their corporate customers the technologies and industries driving the and exploring how banks can harness development of IoT today and explored how technology to help improve this ecosystem. payment services can become smart payments The paper was published in April 2019. by utilising IoT. A set of principles driving IoT development was outlined by the group. In addition, in January 2019, the group started working on phase three, exploring the Furthermore, the group defined principles implications of introducing instant payments essential for adapting payment services to IoT. and new intraday liquidity regulations to the The group concluded by examining key issues corporate liquidity management ecosystem. that the financial services industry will need to A paper entitled “Impact of instant payment explore collaboratively in order to ensure that and intraday liquidity on the corporate liquidity smart payments are fit for purpose in an IoT management ecosystem” was released in ecosystem. A paper entitled “The Internet of September 2019. Things and Smart Payments” was released in September 2019. In mid-September, the LMWG kicked off phase four with the objective to articulate how In the final quarter of the year, the group, data analytics supports the decision-making under new chairmanship, deliberated its next processes of treasurers. The goal of this steps and the potential of turning its attention research phase is to better comprehend what to rising technologies other than blockchain data analytics really is and how it relates to technologies. machine learning and Artificial Intelligence.

14 REPORT OF THE BOARD 2019 15 MARKET PRACTICES AND REGULATORY GUIDANCE The goal of the Open Forum on Open Banking and Digital Transformation is to support the industry by fostering a transparent and 1.1.5 PSD2 PRACTITIONERS’ PANEL cohesive discussion around the impact of digitalisation on the wider payments and Throughout 2019, the panel continued to transaction banking landscape. In this context, monitor the transposition and implementation special emphasis is placed on topics around of the PSD2 and discussed key developments Open Banking, the ongoing introduction and open issues related to the regulatory of real-time end-to-end processes and the technical standards and guidelines issued by increasing use of technology in general, such the European Banking Authority as well as their as Artificial Intelligence, data economy or cyber practical impact. Participants kept contributing fraud. Approaching digital banking through the to the national transposition tables, which were lens of payment services, the forum provides updated on the EBA website in line with the a space for financial industry practitioners to transposition progress. exchange information about Open Banking concepts pursued by various industry initiatives The panel placed a special emphasis on or communities as well as future-oriented the access-to-account (XS2A) requirements payment models and functionalities across stipulated by the PSD2. As of March 2019, Europe. account-servicing payment service providers (AS-PSPs) were required to offer XS2A testing Bringing in stakeholders with interests in the facilities to third-party providers (TPPs). At wider context of digital banking facilitates a EBAday 2019, the panel published key findings joint discussion on how to move the entire of a questionnaire on the status of XS2A financial industry into this new era and address testing preparations among AS-PSPs. The related hurdles or challenges. The Open Forum questionnaire was further designed to help 1.1.4 OPEN FORUM ON OPEN BANKING is moderated by an independent and neutral identify additional needs or open questions on AND DIGITAL TRANFORMATION industry expert. testing at both individual and industry level and With the implementation of PSD2 in September was a follow-up to a questionnaire conducted 2019, the PSD2 Panel had successfully The Open Forum on Open Banking and In 2019, the EBA facilitated two Open in late 2018 on the status of XS2A testing served its mission and turned its attention Digital Transformation was launched in 2019. Forum meetings: “Open Banking – beyond preparations in the run-up to the March 2019 to deliverables and implications regarding Its creation was the result of a merger of the compliance: bridging the gap between legacy milestone. other legislation, such as the EU Regulation Open Forum on Open Banking and the Open systems and the API future” which was held on Cross-Border Charges and the EU VAT Forum on Pan-European Instant Payments. in Paris on 15 May 2019 and “Moving forward Aside from fostering expert exchanges among Directive. This led to the decision to shift the Participants in both fora had increasingly on the digital journey – which payment its participants, the panel also received regular focus of the panel from PSD2 to EU payments found the topics of their discussions to be methods will win the hearts and minds of the updates on other industry groups focusing on legislation in general and to create a Payments so intertwined that they should be explored customers? Will we still need cash...?”, which PSD2-related topics. This input included guest Regulation Sounding Board in 2020, which together, which is why the EBA proposed to took place in Amsterdam on 24 October 2019. contributions by organisations and collective should assess the need for creating dedicated merge the discussion into one forum going Both meetings were well attended. undertakings supporting PSD2 compliance and activity groups to zoom in on relevant forward. implementation efforts. regulations or regulatory initiatives.

16 REPORT OF THE BOARD 2019 17 In the second half of the year discussions until the entry into force of the revised ECB continued on how to best progress two of Regulation on Payments Statistics. these recommendations in particular: The note sets forth recommended steps to Ξ establishing a forum at a pan-European minimise fragmentation risks and ensure both level enabling the exchange and discussion maximal legal certainty and longer-term viability of recent and relevant fraud case for the implementation programmes that PSPs experiences and the communication of any and their national competent authorities were related conclusions or guidance to relevant in the process of putting in place for fraud stakeholders reporting. The key findings and open questions and 1.1.7 JOINT PSD2-SMART2 WORKSHOP identified in the note were, among others, SERIES ON FRAUD REPORTING shared with representatives of the European Ξ creating or supporting the creation of a 1.1.6 SCT INST MIGRATION ACTION (ECB) working on the revised pan-European fraud-related register or ROUND TABLE (SMART2) Participants from the PSD2 Practitioners’ ECB Regulation. information service to share fraudulent/ Panel and from SMART2 combined forces suspicious IBANs or run checks against, In 2019, SMART2 mostly focused on enhanced in early 2019 in a series of workshops to Another important outcome of the workshop as part of the payment initiation/execution fraud detection measures. The group also exchange views on and discuss the various series was a note seeking clarification on the process. continued its analysis of reason code usage interpretations around the European Banking definition of e-money transactions and the in the SCT Inst context but did not see any In Q4 2019, SMART2, at the request of the Authority’s Guidelines on Fraud Reporting. related fraud reporting requirements issued by pressing need for further action in this area. EBA Board, carved out the requirements for Initially planned as a stand-alone event, the the European Banking Authority. The note was a dedicated EBA group working on these workshop developed into a series to tackle the compiled in Q4 2019 and published on The SMART2 sub-group on sanction-screening matters. SMART2 participants also confirmed deliverables agreed by its participants. The 21 January 2020 with the endorsement of and fraud detection measures turned its their commitment to appoint experts to this last workshop session on the topic was held in banks from nine EU countries. attention to delivering an overview of national group, which should prepare the ground for November 2019. fraud information registers as well as best experience and information/data exchange The note points out that the current definitions practice recommendations for detecting on fraud-related matters in a trusted and This joint SMART2-PSD2 Panel initiative of e-money provided by the European and combatting fraud in relation to SCT Inst secured environment. As a consequence, the delivered lists of open questions around the authorities are not clear enough and would transactions in particular. This work resulted EBA Board created the EBA Expert Group on fraud reporting guidelines and about the benefit from a detailed review. The note also in the publication of a SMART2 note with Payment Fraud-related Topics based on the filling-in of the fraud reporting templates by the details how the workshop participants reached recommendations on “Best practices to proposed mission on 23 January 2020. European Banking Authority. the conclusion that fraudulent prepaid card support PSPs in detecting/combatting fraud transactions are the only transactions that and scam,” which was issued in June 2019 and In addition, SMART2 participants continued An important outcome of these workshop can be reported in the e-money category presented at EBAday. The recommendations to monitor developments around national sessions was a note on fraud reporting provided by the European Banking Authority's provided in this note covered practices to confirmation of the payee solutions with a view consolidation issued on 9 April 2019 with Guidelines on Fraud Reporting. It would thus be implemented at AS-PSP-internal level, to assessing how such a solution could best the endorsement of 18 AS-PSPs from ten be further helpful if this requirement could be practices that would require collective action be defined at a pan-European level. SMART2 European countries. In order to ensure a clarified further and applied in a uniform way at inter-PSP level and/or at infrastructure further started looking into determining a viable uniform, consolidated and stable approach across Europe. level for a positive impact and measures that pan-European approach enabling the originator to fraud reporting across all Member States would require actions at public authority or law PSP to communicate relevant information for of the , the note called on EU Both notes issued by the joint SMART2-PSD2 enforcement level. fraud detection purposes to the beneficiary regulators to put on hold the implementation Panel initiative are available for download on PSP as part of an instant payment transaction. of the Guidelines of the European Banking the EBA website in the Publications section. Authority on Fraud Reporting under PSD2

18 REPORT OF THE BOARD 2019 19 1.1.8 CONTENT PORTAL ON CYBER 1.1.9 CONTRIBUTION TO THE EVOLUTION REGULATIONS AND INDUSTRY OF THE PAN-EUROPEAN PAYMENTS STANDARDS ECOSYSTEM

Against the background of the increasing The EBA represents its members with a number of cyber-related regulatory and country-neutral perspective and a practitioner’s industry initiatives, the Board, in February voice in its wider dialogue with major industry 2019, initiated a project to identify relevant bodies and stakeholders by contributing to legislation and standards in this field. To help the shaping of the future payments landscape EBA Members to understand and deal with through its participation in the following existing and future cyber-related industry European and global bodies and groupings: frameworks, the intention of the project is to create an e-repository, which should provide transparency, basic descriptions EUROPEAN MULTI-STAKEHOLDER FORUM and a standardised view on relevant market ON E-INVOICING (EMSFEI): regulations and industry standards, as well as on their specific impact on banking technology. The EBA is a full member of the EMSFEI. Furthermore, the repository should identify a Set up by the European Commission, this the EPC is the management of four payment NETWORKING AND EVENTS best practice framework and relevant guidance forum brings together delegates from national schemes that facilitate over 39 billion on how to implement new or validate already e-invoicing fora and key stakeholders from transactions in 36 countries each year. The The EBA organises events that enable payment existing security processes or domains. the user side of the market. Its objective is to EBA is a member of the EPC. practitioners to broaden their understanding Relevant regulations and industry initiatives help pave the way for a broad-scale adoption of the payments and transaction banking in the scope of this workstream are, among of e-invoicing at both national and EU level. industry and to directly interact with peers from others, PSD2, GDPR, TIBER, SWIFT CSP, PCI The forum creates a unique opportunity to GLOBAL SUPPLY CHAIN FINANCE FORUM payments-related organisations across Europe DSS and NIST. exchange experiences and best practices (GSCFF): and beyond. across borders. Furthermore, the forum The project is supported by a Sounding Board, discusses issues of common interest, with the Together with the International Chamber of which is composed of high-level industry possibility to issue recommendations to the Commerce (ICC), the Bankers Association 1.1.10 EBADAY 2019 specialists and practitioners who are actively European Commission. for Finance and Trade (BAFT), Factors Chain involved in the field of cyber- and security- International (FCI) and the International In 2019, the Association’s flagship event, the related industry activities. Throughout 2019, the Trade and Forfaiting Association (ITFA), conference and exhibition EBAday, took place Sounding Board helped to specify the content EUROPEAN PAYMENTS COUNCIL (EPC): the EBA continues to promote the use of in Stockholm, Sweden, with a 21-session and the design of the e-repository with a view standard definitions for techniques of supply programme, a sold-out exhibition floor and to making this new facility available to EBA The EPC represents payment service providers chain finance. The GSCFF was established close to 1,200 attendees. The focus of EBAday Members in early 2020. (PSPs) on all European payment issues. Its in January 2014, as an initiative of these 2019 was reflected in its title: “Accelerating goal is to contribute to harmonise payments industry associations, to address the need digital transformation in payments”. The e-repository is scheduled to go live in in SEPA, ultimately supporting European for developing, publishing and championing Consequently, the agenda provided a wide Q2 2020 with a first set of relevant regulatory competitiveness and innovation. In constant a set of commonly agreed standard market variety of insights into globally relevant topics, documents, standards and industry documents. dialogue with stakeholders and regulators definitions for Supply Chain Finance (SCF) ranging from real-time payment processing to Further content will follow throughout the year. at European level, the EPC supports and and for SCF-related techniques. This initiative innovation, Open Banking, new technologies, The Sounding Board will periodically check the promotes the integration and development triggered and helped to drive the much-needed correspondent banking, regulatory changes need to update and extend the e-repository. of European payments. The primary task of standardisation of the SCF industry. and customer needs. All the networking sessions received very positive feedback and were perceived as lively and informative.

20 REPORT OF THE BOARD 2019 21 A two-day event, EBAday comprised 16 1.1.12 LOCAL EBA ROADSHOW SESSIONS parallel panel sessions as well as a keynote, a challenge speech and three roundtable In 2019, the Association continued its local discussions. The exhibition featured 63 stands. roadshow sessions. Launched in 2018, these For the third consecutive year, the exhibition sessions are aimed at deepening the regional floor also included a fintech zone, in which footprint of the EBA and at directly feeding its 16 fintech start-ups presented their business findings into the different local communities. and innovations to the attendees. For the first The sessions are held in the local language time, the exhibiting fintechs had the chance to and targeted at EBA Members operating in a pitch their ideas to the audience in interactive specific regional or local market. sessions. The EBA roadshow sessions are organised The EBA lounge, which was introduced in with the support of local EBA Board members 2015, was again part of the exhibition floor, or member representatives and star speakers offering not only a gathering place to all EBA from the respective communities participating Members, but also a platform for EBA working in different EBA working groups and/or groups to present and discuss their findings, other EBA-facilitated expert groups. These which they did through six well-attended sessions provide detailed updates on payment sessions on the latest work done by the developments and trends discussed in the Association in the areas of Open Banking, different EBA activity streams, including Ξ the EBA Winter School “The payment after liquidity management and fraud prevention. insights into thought leadership discussions, TRAINING AND EDUCATION tomorrow: creating value for the customer Furthermore, the EBA presented its activities guidance on regulatory matters or market of the future” and offerings on the exhibition floor with its practices and topics covered in the educational own stand. seminars of the Association. 1.1.13 SCHOOLS AND SEMINARS The educational events 2019 were attended by 101 delegates, raising the total number of During the period under report, EBA roadshow In 2019, the EBA organised four educational alumni having attended the EBA’s educational 1.1.11 EBADAY BUSINESS FORA sessions were hosted by the Spanish and events, allowing members to come together, events to over 950. Portuguese EBA communities. Given the deepen their knowledge and get fresh In preparation of EBAday 2019, the EBA and success of this format, the EBA will continue to perspectives on industry topics that are high up The EBA educational events are geared Finextra also organised three EBAday Business run local roadshows and thus provide access on the agenda of payment professionals: towards providing training and networking Fora, one in Stockholm, one in Dublin and for all of its members to the findings and opportunities for all EBA Members: while Ξ The EBA Liquidity Management Training one in Helsinki. The fora were well attended. recommendations of its working groups and the EBA Summer and Winter Schools are Seminar “Managing corporate liquidity in Participants invited to these breakfast sessions practitioners’ panels. particularly suited to foster and promote changing and disruptive times” discussed selected topics from the EBAday emerging talents, the EBA Global Seminars conference programme with three to four Ξ the EBA Summer School “The Invisible serve as a high-level meeting point of senior keynote speakers opening the session. Payment” managers to discuss, in depth, the strategic Ξ the EBA Global Seminar “Real-time future of their businesses. The EBA Liquidity payments and Open Banking: new realities, Management Seminars provide a platform new challenges”. This seminar was the for delegates to discuss, experience and third of its kind and took place in London in understand corporate liquidity management the week prior to Sibos. needs within the liquidity ecosystem.

22 REPORT OF THE BOARD 2019 23 1.2 GOVERNANCE 1.3 MARKETING AND REVIEW COMMUNICATIONS

To reflect the increasingly global scope of many 1.3.1 EBA WEBSITE AND EBA MEMBER 1.3.2 EXTERNAL CONFERENCES 1.3.3 FACT SHEETS payments-related topics and to engage an PORTAL even wider range and diversity of payments At Sibos 2019 in London, the Association In 2019, the practitioners in its activities, in 2019, the EBA In 2019, the EBA website was continually organised a community session on introduced fact sheets on the EBA working Members supported a geographical extension updated to reflect the latest working group “Fast-track to the future: How to keep up group papers. The release of each working of the Association’s membership base to findings and practitioners’ recommendations with ever-accelerating transformation in group publication is now accompanied by a organisations based in member states of the as well as information about the Association’s payments?”, which was attended by 150 fact sheet that highlights the major points and Organisation for Economic Co-operation and events and educational activities. participants and zoomed in on key findings arguments of the paper. The fact sheets are Development (OECD). and recommendations from the EBA’s intended as both a stand-alone takeaway from The publications section on the EBA Member work on Open Banking, real-time liquidity the working group research and as a teaser Furthermore, the Board proposed to the Portal was expanded to include, besides the management, fraud intelligence co-operation, to encourage EBA Members to download the members of the Association to allow publications of the working groups, the EBA cryptotechnologies and Artificial Intelligence. full-length paper. representation and voting by proxy in case a Insight Newsletter, EBA event summaries, and member is unable to attend General Meetings other documents. Access to the publications As in previous years, the Euro Banking While the working group papers are accessible to ensure that the prerequisites for reaching section is open to all employees of EBA Association also contributed to the Euro to EBA Members only, the fact sheets will be the majorities required for valid deliberation member institutions. Finance Week’s payments conference in shared with a broad audience of members and and decision-making are met. The revised Frankfurt. The conference took place in non-members via the EBA website and social Articles, covering the changed requirements November 2019 and was opened by EBA media. They will also be distributed in print regarding location and geographical coverage Chairman Wolfgang Ehrmann. The ongoing form at EBA events and conference stands. of membership and proxies for participation digitalisation process in payments was at the in General Meetings and for voting, were centre of the agenda of the event. endorsed by the EBA Member Representatives at the EGM 2019. The new Articles entered into Furthermore, the Association contributed force on 18 June 2019. updates on its different work streams and findings to a number of conferences and events throughout the year, including customer and industry meetings held by EBA Members and Associate Members.

24 REPORT OF THE BOARD 2019 25 1.4 CHANGES IN THE BOARD OF THE ASSOCIATION

During the Annual General Meeting (AGM) on 17 June 2019, the Chairman, Deputy Chairman and three Board members were re-elected for a three-year (Chairman and three Board members) and a two-year (Deputy Chairman) term of office as follows: Ξ Wolfgang Ehrmann – Chairman (Landesbank Hessen-Thüringen) Ξ Vincent Brennan – Deputy Chairman () Ξ Krister Billing (Skandinaviska Enskilda Banken) Ξ Gerald Hechl (Raiffeisen Bank International AG) Ξ Jürgen Wendt (DZ BANK AG)

BOARD OF THE EURO BANKING ASSOCIATION

Accordingly, since since the AGM on 17 June 2019, the Board has been composed of the following persons: End of mandate 1.5 CHANGES IN EBA CHAIRMAN MEMBERSHIP Wolfgang Ehrmann Landesbank Hessen-Thüringen () AGM 2022 DEPUTY CHAIRMAN Since the last AGM on 17 June 2019 until 31 Vincent Brennan Bank of Ireland AGM 2021 EBA BOARD MEETINGS May 2020, both the number of EBA Members OTHER BOARD MEMBERS and the number of EBA Associate Members In 2019, the Board met on: have remained stable despite the recent Philippe Debrue Belfius Bank AGM 2020 statutory changes in the membership structure Ξ 21 February Fernando Lardiés AGM 2021 with the decrease (-5) in the number of Claudio Magnaghi Banco BPM AGM 2021 Ξ 9 May Members compensated by the increase (+5) in José Vicente Banco Comercial Português AGM 2021 Ξ 23 May the number of Associate Members (Ecosystem Partners). Andrew Smale Bank AGM 2021 Ξ 11 July Krister Billing Skandinaviska Enskilda Banken AGM 2022 Ξ 12 September Gerald Hechl Raiffeisen Bank International AGM 2022 Ξ 28 November Jürgen Wendt DZ BANK AGM 2022 Nicola Coyne Bank AGM 2020 Han Joosten AGM 2021 Since 1 January 2020, the Board has met on: François-Xavier Nivoit HSBC France AGM 2020 Ξ 23 January Tino Kam Bank AGM 2020 Ξ 31 March Serge Wagener Banque et Caisse d’Epargne de l’Etat AGM 2020 Ξ 8 April Ξ 18 May

26 REPORT OF THE BOARD 2019 27 BOARD OF THE EURO BANKING ASSOCIATION

Wolfgang Ehrmann Vincent Brennan Chairman Deputy Chairman LANDESBANK HESSEN- BANK OF IRELAND THÜRINGEN Appointed on 17/06/2019 Appointed on 17/06/2019 End of mandate: AGM 2021 End of mandate: AGM 2022

Fernando Lardiés Claudio Magnaghi BANCO SANTANDER BANCO BPM Appointed on 11/06/2018 Appointed on 11/06/2018 End of mandate: AGM 2021 End of mandate: AGM 2021

Krister Billing Nicola Coyne Philippe Debrue François-Xavier Nivoit Andrew Smale José Vicente SEB BARCLAYS BANK BELFIUS BANK HSBC FRANCE WELLS FARGO BANK BANCO COMERCIAL Appointed on 17/06/2019 Appointed on 19/06/2017 Appointed on 19/06/2018 Appointed on 19/06/2017 Appointed on 11/06/2018 PORTUGUÊS End of mandate: AGM 2022 End of mandate: "AGM" 2020 End of mandate: "AGM" 2020 End of mandate: "AGM" 2020 End of mandate: 15 May 2020 Appointed on 11/06/2018 End of mandate: AGM 2021

Soey Tin (Tino) Kam Serge Wagener Jürgen Wendt Gerald Hechl Han Joosten NORDEA BANK ABP BANQUE ET CAISSE DZ BANK RAIFFEISEN BANK RABOBANK Appointed on 03/05/2019 D'EPARGNE DE L'ETAT Appointed on 17/06/2019 INTERNATIONAL Appointed on 11/06/2018 End of mandate: "AGM" 2020 Appointed on 19/06/2017 End of mandate: AGM 2022 End of mandate: AGM 2021 Appointed on 17/06/2019 End of mandate: "AGM" 2020 End of mandate: AGM 2022

28 REPORT OF THE BOARD 2019 29 1.6 OUTLOOK FOR 2020+

The Association’s work programme for 2020 Ξ real-time payments and Open Banking THOUGHT LEADERSHIP AND 1.6.2 CRYPTOTECHNOLOGIES, SMART and beyond was delivered in Q4 2019 based (Global Seminar in October) INNOVATION PAYMENTS, AND STABLECOINS on input from its expert groups, country WORKING GROUP Ξ request to pay ecosystem considerations groups and a member survey on the EBA (under consideration with a small group of work programme conducted in the autumn of 1.6.1 OPEN BANKING WORKING GROUP In the next phase of their research, the member experts) 2019. This input enabled the EBA to prioritise members of the EBA Cryptotechnologies and a number of new topics that its members Ξ pan-European KYC harmonisation (under In 2020, the EBA Open Banking Working Group Smart Payments Working Group will explore had identified as being highly relevant and to consultation with interested member (OBWG) decided to explore the role of trust the implications of central bank digital money channel them into existing and new working experts) in the financial system in the digital era. The and stablecoins. In 2019, the emergence of groups, practitioners’ groups, open fora, and Ξ European regulation and regulatory trusted relationship with customers has always "stablecoin" initiatives has highlighted the educational/networking events. initiatives with an impact on the payments been an inherent part of the financial sector importance of continuous improvements to value chain (Payment Regulation Sounding business, but as digital transformation gains payment arrangements in order to meet market The result of this detailed member consultation Board) speed and the sector is opening up, data- and consumer expectations for convenient, was reflected in the membership proposition driven business models flourish, and digital fast, efficient and inexpensive payments Ξ cyber regulations and related industry for 2020, which was submitted to all EBA transactions of all sorts exponentially increase. – especially cross-border. The ECB and standards (Cyber Regulation e-repository Members in in Q4 2019 together with their New dynamics kick in that have a profound other central banks and national competent and Sounding Board) pro forma invoice for 2020. In line with this impact on the structure of the bank-customer authorities have also recognised this trend proposition, the following industry topics are Ξ collaborative approaches and tools for relationship and on the role and the shape of and will explore further the ongoing digital being taken forward or being further evaluated real-time fraud combatting (Expert Group trust in it. transformation of the payment ecosystem, and by the Association in 2020 (the group or on Payment Fraud-related Topics and in particular the consequences of initiatives stream where a topic is tackled is indicated in SMART2) In this context, the working group will focus on such as stablecoins. The goal of the working brackets): analysing how banks can serve as custodians group is to contribute to learning about and of trust in an Open Banking environment and exploring the emergence of stablecoins, and Ξ digital trust (Open Banking Working Group) the digital world. The group will assess the analyse the opportunities and implications Ξ stablecoins (Cryptotechnologies & Smart opportunities for banks to leverage their assets thereof, with the objective to produce a white Payments Working Group) around digital trust as a value proposition itself. paper. Ξ data analytics in liquidity management (Liquidity Management Working Group) The OBWG will set out a clear definition of This next phase of research was endorsed by digital trust by clarifying what establishes trust the EBA Board in January 2020. To reflect its Ξ liquidity risk in a multi-currency in a digital world and by elaborating on different new focus, the working group was renamed environment (Liquidity Management concepts of trust such as institutional and Cryptotechnologies, Smart Payments and Working Group) infrastructure trust. Digital trust is not just about Stablecoins Working Group. Ξ intraday liquidity and instant payments technology, there are various layers related to (Liquidity Management Seminar in trust that will be explored including operations/ September) processes, people, propositions/offerings and communication. Industry collaboration Ξ cyber security and fraud (Open Forum on and the implications from other stakeholders Open Banking and Digital Transformation) such as fintech and other non-bank players Ξ Internet of Things and data (Open will be explored. The objective is to produce a Forum on Open Banking and Digital white paper on digital trust in the era of Open Transformation) Banking around EBAday 2020 Ξ strategic implications of ISO 20022 migration (Summer School in July)

30 REPORT OF THE BOARD 2019 31 1.6.3 LIQUIDITY MANAGEMENT 1.6.4 OPEN FORUM ON OPEN BANKING WORKING GROUP AND DIGITAL TRANSFORMATION (FACILITATED BY THE EBA) In September 2019, the EBA Liquidity Management Working Group launched phase The EBA Board has agreed to continue the four of its thought leadership work aimed at work of the “Open Forum on Open Banking identifying and understanding client needs and Digital Transformation”. and trends within the corporate liquidity management ecosystem and at understanding The Open Forum on Open Banking and how regulations, digitalisation and market Digital Transformation will meet to discuss initiatives are affecting the ecosystem, from topics concerning digitalisation in banking. 1.6.6 SCT INST MIGRATION ACTION both the corporate and bank perspective. It will focus on the use of future-oriented MARKET PRACTICE AND ROUND TABLE (SMART2) technologies, such as AI, robotics or cloud REGULATORY GUIDANCE As a first project in this phase, the working technology, questions around security such In line with guidance provided by the EBA group will look into the use case of data as cyber-threats or fraud risks, new methods Board in January 2020, the SMART2 sub-group analytics supporting the decision-making of customer interaction and implementation 1.6.5 PAYMENT REGULATION SOUNDING on sanction-screening and fraud detection in the context of liquidity management. An challenges in general. BOARD (PRSB) measures started into 2020 with a focus on the informative paper will be published in the May following two deliverables: 2020 time frame. The group will then look at With one event on agile processes in the With regard to the ever-increasing number of Ξ to explore the lessons to be learnt from the topic of liquidity risk in a multi-currency workplace already having been held, two are to European regulations and regulatory initiatives recent national confirmation of payee environment from both the corporate and follow in 2020, one on cyber security and fraud impacting the field of payments, the EBA is implementation projects and feed any bank perspective with the aim to deliver their and one on the Internet of Things and data. currently preparing the launch of a Payments relevant findings into the industry debate analysis in the third quarter of 2020. Regulation Sounding Board (PRSB). on a potential pan-European solution

The task of the PRSP is to monitor European Ξ to help develop a pan-European approach regulatory activities with a direct or indirect for populating an optional SCT Inst fraud impact on the payments value chain and on information field, which would enable EBA member institutions. The PRSB will also the exchange of information between evaluate requests from EBA Members with the payer’s PSP and the payee’s PSP regard to activities in the field of regulatory to facilitate fraud detection activities at guidance. In this capacity, the PRSB will act as beneficiary PSP level an advisory body to the EBA Board. Following feedback that the EBA had received Once a regulation or an upcoming regulatory in response to the publication of the note on initiative is seen as lying within the above- open questions around e-money definitions, mentioned scope, the PRSB may propose the the sub-group has also begun to drill into constitution of a regulatory activity group to the fraudulent use of closed-loop cards and help EBA Members understand the practical other anonymous cards with a view to raising impact of this regulation and exchange views awareness of this issue among PSPs and towards ensuring a harmonised implementation relevant stakeholders. across Europe.

The PRSB will start its work in Q2 2020.

32 REPORT OF THE BOARD 2019 33 Ξ 1.6.7 CONTENT PORTAL ON CYBER seek to clarify what type of intelligence NETWORKING AND EVENTS TRAINING AND EDUCATION REGULATIONS AND INDUSTRY and/or data can be shared in a fraud STANDARDS combatting context taking into account restrictions stemming from legal 1.6.10 EBADAY 2020 AND BUSINESS FORA 1.6.11 SCHOOLS AND SEMINARS The e-repository on cyber regulations and requirements (e.g. GDPR) industry standards is scheduled to go Ξ develop a proposal for the launch of an In light of the unpredictable progression of the Due to COVID-19-related restrictions, the EBA live in Q2 2020 with a first set of relevant initiative on experience exchange on fraud- COVID-19 outbreak in Europe and globally, has postponed its educational events to the regulatory documents, standards and industry related matters the Euro Banking Association announced on second half of the year. The EBA Liquidity documents. Further content will follow 11 March 2020 that EBAday 2020 would be Management Training Seminar will focus on throughout the year. The Sounding Board of The scope of the activities of the EGPF is on rescheduled from its original date of 19 – 20 “Intraday liquidity and instant payments” and cyber experts will periodically check the need fraud in payments, irrespective of the payment May. The 2020 edition of the EBA’s flagship will take place in Frankfurt, Germany on 21 and to update and further extend the e-repository. instrument used such as SCT, SDD, SCT Inst, event EBAday will now take place from 25 – 26 22 September 2020. cards or e-money. A key focus of the EGPF will November in The Hague, The Netherlands. be to agree which data and information should Under the headline “The Turning Point in The fourth EBA Global Seminar, which again 1.6.8. EXPERT GROUP ON PAYMENT ideally be shared to ensure a viable and future- Payments Transformation – New business focuses on real-time payments and Open FRAUD-RELATED TOPICS (EGPF) proof approach to combat and prevent fraud. models, new operating models, new forms of Banking, will be organised in New York, NY, collaboration”, the event will again feature a on 1 and 2 October 2020 and will be offered PSPs that can exchange instant payments As it has done in the past, the EBA will maintain large exhibition floor and a fintech zone, where as virtual module as well. The EBA also plans in real time are technically also able to a close dialogue with other industry bodies, start-ups can present their latest products or to hold its Winter School in February 2021 in share fraud-related intelligence in real time. such as the European Payments Council, and innovations. La Hulpe, Belgium. The Summer School “ISO Connecting the dots and combining the pieces strive for complementarity with other relevant Age – the changeover to a new payments era” of fraud-related information that each of them co-operative initiatives being pursued at a As in 2019, the Euro Banking Association will has been postponed to early June 2021 and holds will help PSPs to more effectively detect pan-European level. showcase its activities and thought leadership will take place in Nice, France. and fight fraud. Based on the requirements deliverables at a dedicated EBAday stand. detailed and endorsed by SMART2 around the Furthermore, members of different EBA The exact event dates will be communicated in turn of the year, the EBA created an Expert 1.6.9 CONTRIBUTION TO THE EVOLUTION working and expert groups will share and due course. Group on Payment Fraud-related Topics in OF THE PAN-EUROPEAN PAYMENTS discuss key findings and recommendations January 2020 to help pave the way towards ECOSYSTEM with interested EBAday attendees at the EBA developing a pan-European fraud intelligence Lounge. approach. As in previous years, the EBA will also continue to contribute to the delivery of Market Practices The EBAday Business Fora, usually held as The EGPF was launched in March 2020 with & Regulatory Guidance through its participation physical meetings in the run-up to EBAday, the mission to: in industry bodies and initiatives. were replaced by "EBAday Online". The first of these open webcasts took place on 20 May. At Ξ develop a glossary of payment fraud types least two more will follow before EBAday 2020. Ξ define a framework of identified needs to allow the definition of requirements for the creation of a contact details database

34 REPORT OF THE BOARD 2019 35 POTENTIAL FUTURE ACTIVITIES 1.6.13 REQUEST TO PAY ROUND TABLE MEMBERSHIP

Whereas the EPC is currently working on 1.6.12 KNOW-YOUR-CUSTOMER (KYC) delivering a pan-European Request to 1.6.14 NUMBERS INITIATIVE Pay (RTP) Scheme before end of 2020, a couple of RTP solutions are already in place, As at 31 May 2019, the total number of EBA Against the background of a multitude of emerging or being considered at a national Members and Associate Members was the national and pan-European data definitions and pan-European level. A pan-European RTP following: and standards, a high amount of country- instrument is also a top item on the corporate Ξ Members: 106 specific divergencies and a lack of harmonised wish list for value-added services around regulatory requirements across Europe, the instant payments, as confirmed by corporate Ξ Associate Members: 56 EBA is currently assessing the interest of its treasurers and payment specialists at former members in a platform where different industry EBA events. initiatives and banks could come together to provide transparency and drive pan-European Against this background, the EBA is currently harmonisation, e.g. through the creation of a testing the appetite and interest for an KYC data model and management standard on industry-wide RTP forum with a small group of a meta level. In case of significant interest, an member banks. Subject to positive feedback, initiative could be launched in the second half such a forum could be set up as a platform of the year. to broaden the exchange of views amongst all payment industry practitioners and other stakeholders, to complement the ongoing EPC scheme discussions with wider ecosystem considerations and to support the migration of minds by looking at strategic implications and pre-requisites for a successful roll-out of the scheme.

36 REPORT OF THE BOARD 2019 37 2 FINANCIAL SITUATION, P&L STATEMENT MEMBERSHIP FEE STRUCTURE AS AT 31 DECEMBER 2019 kEUR 2000

1,643 The Association ended the fiscal year 2019 2.1.2 GENERAL AND ADMINISTRATIVE with a net positive result of EUR 176 K, a EXPENSES 1,424 1,393 difference of EUR 391 K compared to 2018 100 A M where the Association had recorded a negative This item contains the HR administrative result of EUR 215 K. This positive development and support expenses, the rent of premises in 2019 is largely attributed to positive member and office space, generic expenses for 1000 evolution, strong results of the educational external relations, such as the Association’s activities and improved cost management. This engagement in industry bodies and initiatives B M strong positive income will help to strengthen fostering the development of the pan-European the financial reserves of the Association. payments ecosystem, consultancies and any 00 legal fees that are not related to any specific support activity of the Association. 2.1 OVERALL EXPENSES INCURRED IN 2019 The level of these expenses increased by 5% 0 on a year-on-year basis, from EUR 1.5 M in 201 2018 2019 The expenses of the Association amounted 2018 to EUR 1.6 M in 2019, which is mainly to EUR 2 M in 2019 compared to EUR 1.9 M due to an increase in HR administrative and R: F 201 2018, B M . in 2018. This corresponds to a year-on-year support expenses plus a growth of office space increase of 6%. The increase is ascribed to rental fees in 2019. a change of allocation in the Association’s operating expenses affecting, principally, the costs to support activities, including costs 2.2 REVENUES IN 2019 related to educational activities. EXPENSES EVOLUTION The total revenues of the Association amounted to EUR 2.2 M in 2019, which represents a 30% kEUR 2.1.1 EBA SUPPORT ACTIVITIES increase from 2018. This positive evolution 2,006 was supported by stable membership figures 2000 1,888 EPC membership 1,8 Activities organised by the Association to for both Bank and Associate Members. The support the members are mainly the operation Association’s educational and seminar offerings Expenses for support activities of three different working groups and the Open contributed significantly to the positive result 100 Forum, organised in the “Thought Leadership as well. One-off and other expenses and Innovation” stream, furthermore, the PSD2 Practitioners’ Panel and SMART2 with Consultancies and legal fees 2.2.1 MEMBERSHIP REVENUES its sub-groups run in the “Market Practice and 1000 Regulatory Guidance” pillar, as well as the External relations participation in important industry events, such With the financial year 2019, the Association as Sibos. The expenses relating to all those introduced a new mechanism to calculate HR and service agreement activities amounted to EUR 405 K in 2019. membership fees. At the EGM 2018, the 00 EBA Members ratified a governance reform, which, among other changes, led to an implementation of an evolved membership structure. Since 2019, the membership 0 structure no longer differentiates between 201 2018 2019

38 REPORT OF THE BOARD 2019 39 2.3 INCOME TAX AND NON-MEMBERSHIP REVENUE EVOLUTION RESULTS FOR 2019 kEUR 500

419 Full and User Members but relies on an As a consequence of prior years’ losses, the 400 asset-based concept to calculate the yearly Association will not have to pay income taxes 36 membership fees. More precisely, the in 2019 and the net result after tax stands at calculation of membership fees follows the EUR 176 K. 300 EBA methodology of a four-group tiering concept, based on the assets of a member bank. 2.3.1 BALANCE SHEET AND CASH 200 POSITION 2.2.2 NON-MEMBERSHIP REVENUES The balance sheet of the Association showed 93 100 This revenue category includes the self-sustained an increased patrimonial value of EUR 3.2 M for E activities of the Association, i.e. EBAday, 2019, constituted mainly of current assets at EUR seminars and all educational activities organised 3.1 M, including a cash position of EUR 1.4 M. 0 by the Association for its members. These 201 2018 2019 activities generated a positive margin in 2019, On the liabilities side, the equity position of providing the Association with extra income in the Association is at the level of EUR 946 K; addition to the recurring membership fees. the remaining position of EUR 2.3 M is mainly composed of payables and deferred income The positive margin generated by these events, representing EUR 1.6 M income billed in 2019 EUR 420 K, is higher by EUR 327 K compared but belonging to fiscal year 2020. to 2018 standing at EUR 93 K. This strong performance is mainly due to a successful Together with the introduction of the revised BBALANCE SHEET EVOLUTION EBAday 2019 and to outstanding educational membership tiering and membership fees, events. a new timeline for the collection of the Cash and short term deposit membership fees has been introduced. This kEUR Receivables & pre-payments revised process helps the Association to 00 3,217 3,217 improve its yearly cash flow position. Fixed assets 000 2,809 2,809

Capital & reserves 200 Provisions & debts

2000

1,438 1,438 100

1000

00

0 201 2018 2019 2019 2018 201 ASSETS LIABILITIES

40 REPORT OF THE BOARD 2019 41 2.4 EBA BUDGET FOR PROFIT & LOSS EVOLUTION 2020

kEUR

2,500 Ξ For the year 2020, the budget provides the Activities of the Thought Leadership 2,183 2,007 Association with a conservative revenue stream & Innovation and Market Practices & 176 2,005 2,001 1,888 Expenses and reasonable expenditure estimates posting Regulatory Guidance streams: the main 2,000 1,91 1,821 4 a small profit for the 2020 financial year of EUR costs are related to consultancy services 1,62 Income 4 K. to support working and expert group meetings, to help develop publications and 1,500 Net result It is expected that the 2020 revenues will to facilitate workshops and materials. decrease to EUR 2 M ( -8% compared to 2019 actuals) while expenses will remain stable Furthermore, covered are: 1,000 compared to 2019 actuals at EUR 1.6 M. Ξ Fora activities and participation in other industry initiatives: the aim of these The 2020 budget is based on the following 500 activities is to discuss the key issues that assumptions: today raise the interest of EBA Members and stakeholders in the payments industry. 0 The expenses are mainly logistics- and -30 2.4.1 EBA OPERATING CHARGES venue-related plus consultancy costs linked -215 B to the provision of other external services. 201 2018 2019 2020 The operating charges are expected to be Membership fees for participation in other similar to 2019. industry bodies (e.g. EPC) are also covered under this item

2.4.2 COSTS TO SUPPORT EBA ACTIVITIES Ξ Publications and other communication AND PROJECTS formats Ξ Sibos: costs for participation This budget item covers the different activity streams that will be carried out by the Association in 2020, namely working groups as well as other industry and fora activities plus the Sibos representation of the Association. These budget lines will cover all expenses relating to these events.

The estimated amount of the 2020 activities is expected to reach EUR 400 K. The expenditure foreseen for 2020 covers the following activities:

42 REPORT OF THE BOARD 2019 43 2.5 PROJECTED EBA FINANCIALS 2018-2020

REVENUES FOR 2020 P&L STATEMENT – REVENUES AND CHARGES

Actual Actual Budget Budget " Actual 2019 vs 2018 2019 2020 2019 Budget The 2020 budget revenues are projected to be 2.5.2 NON-MEMBERSHIP REVENUES EUR 2 M, 8% less than the 2019 actuals. This (1) Revenues 1,673 1,712 2,183 27% 2,005 mainly results from a conservative approach The net revenues related to the organisation MEMBERSHIP FEES 1,403 1,367 1,643 20% 1,665 with regard to membership figures plus lower of the EBA educational activities and EBAday (including entrance fees) revenues from educational activities. are projected to amount to EUR 340 K which OTHER FEES - ACTIVITIES REVENUES 270 345 539 56% 340 is comparable to the 2019 budget, but less than the 2019 actuals due to fewer educational (2) Costs to support activities 367 289 405 40% 400 2.5.1 MEMBERSHIP REVENUES activities foreseen in 2020. (including SIBOS & EBAday)

In 2020, it is expected that the Association will EXHIBITION COSTS 33 109 30 -73% 114 collect a comparable level of membership fees EDUCATIONAL ACTIVITIES 193 90 as in 2019, where they amounted to EUR 1.6 M. 90

OPEN FORUM AND WORKING GROUPS 141 180 285 58% 196 Although the financial industry as a whole will continue to see market consolidation activities Activities gross margin (1)-(2) 1,306 1,423 1,778 25% 1,605 within all membership categories, the expected level of membership revenues is kept at the (3) Operating charges 1,521 1,568 1,602 2% 1,601 level of the 2019 membership figures.

COMMUNICATION 45 70 15 -79% 30 MEMBERSHIP FEES STRUCTURE CONSULTANCIES 109 80 85 7% 45

EQUIPMENT AND SERVICES 0 4 50

kEUR EXTERNAL RELATIONS 136 86 75 -12% 60 2000 FINANCIAL REVENUES COSTS TAXES 22 29 30% 20 1,643 1,665 HR, SERVICE AGREEMENT AND IT 1,231 1,290 1,384 7% 1,344 E 100 AMORTISATION 20 -50% 51 10 T B Grand Total (1)-(2)-(3), -215 -145 176 221% 4 T Result before tax 1000 T 2

Q2 2020 ADDENDUM AFTER THE BUDGET APPROVAL BY THE BOARD 00 T 1 With regard to the outbreak of COVID-19, a potential negative impact on the EBA budget 2020 cannot be excluded. However, the Association, due to the relatively recent occurrence of the pandemic and of the measures taken by authorities in Europe and around the world, is not in the 0 capacity to finally assess the possible financial impact, which mainly will beelated r to the budget Actuals 2019 2020 B position “Other Fees – Activities Revenues”.

44 REPORT OF THE BOARD 2019 45 APPENDIX 1 ACCOUNTS AS OF 31 DECEMBER 2019 The accounts as of 31 December 2019 are attached separately

Caja Laboral Popular, Coop. de Crédito Plc Cassa di Risparmio di Fermo S.p.A. MUFG BANK, Ltd Cassa di Ravenna S.p.A National S.A. CECABANK S.A. National Westminster Bank Plc Europe Plc Dublin Nordea Bank Abp AG Oberbank AG APPENDIX 2 Crédit Agricole S.A. Oesterreichische Nationalbank Crédit Mutuel Arkéa OP Corporate Bank Plc. LIST OF EBA MEMBERS SpA OTP Bank Plc. (as of 31 May 2020) S.C. Rabobank Nederland A/S Raiffeisen Bank International AG N.V. Raiffeisen Landesbank Südtirol AG Corporación Bancaria, S.A. Bank GPB International S.A. DEPObank- Banca Depositaria ltaliana S.p.A Raiffeisenlandesbank Oberösterreich ABN AMRO Bank N.V. Bank of Åland PLC AG Raiffeisen-Landesbank Tirol AG Aktia Bank plc , NA (Frankfurt Branch) S-Bank Ltd. Allgemeine Sparkasse Oberösterreich Bank DNB Bank ASA SECB Swiss Euro Clearing Bank GmbH , p.l.c. Bank of Ireland DZ BANK AG Skandinaviska Enskilda Banken AB (publ) AE Bank of Elavon Financial Services DAC Société Générale Banca del Fucino S.A. Bank AG Bank Banca di Imola S.p.A. Banque et Caisse d'Epargne de l'Etat S.A. Sparekassen Sjælland Banca Monte dei Paschi di Siena SpA Banque Internationale à Luxembourg Public Company Ltd Bank AG Banca Nazionale del Lavoro S.p.A. Banque Michel Inchauspé (BAMI) HSBC Bank Plc Svenska AB Banque Palatine HSBC France AB (publ) Banca Popolare di Sondrio Barclays Bank Plc ICCREA Banca SpA - Istituto Centrale del Sydbank A/S Banca Sella S.p.A. Belfius Bank SA/NV Credito Coop. The Bank of New York Mellon, Frankfurt Branch Banco BAI Europa S.A. BKS Bank AG ING Bank N.V. UBI Banca S.p.A. Banco Bilbao Vizcaya Argentaria S.A. BNP Paribas Fortis SA/NV SpA UBS AG (UK) Banco BPM S.p.A. BPCE Joh. Berenberg, Gossler und Co. KG Bank AG Banco Comercial Português SA BPER Banca S.p.A. JPMorgan N.A., London Br UniCredit AG Banco Cooperativo Español SA bpost SA de droit public KBC Bank N.V. Unicredit S.p.A. Banco de Sabadell S.A. BRED Banque Populaire Wells Fargo Bank NA London Branch Banco Santander S.A. Caixa Central de Crédito Agrícola Mútuo Landesbank Baden-Württemberg Wirecard Bank AG Bank für Tirol und Vorarlberg AG CaixaBank S.A. Landesbank Hessen-Thüringen

46 REPORT OF THE BOARD 2019 47 LIST OF EBA ASSOCIATE MEMBERS (as of 31 May 2020)

Accenture GmbH (Germany) Icon Solutions Ltd. ACE Software Solutions (Pelican) Incentage AG ACI Worldwide (EMEA) Limited Innopay NL B.V. Auriga S.p.A. Intercope International Communication GmbH Axway Software Lipis Advisors GmbH Bankgirot Mastercard BankiFi Ltd. Microsoft Corporation BearingPoint GmbH MONTRAN Corporation Blossom-It ORACLE Corporation Bottomline Technologies SARL P27 Nordic Payments Platform AB CGI IT UK LTD PPI AG Informationstechnologie CoCoNet AG Redcompass Ltd. Commercial Banking Applications AS (CBA) S.W.I.F.T. SC Dion Transaction Solutions GmbH Samlink Ltd Dutch Payments Association - Betaalvereniging SIA S.p.A Nederland GIRO Software Integrators Ltd DXC Technology STET Ebury Partners UK Limited Swisskey AG ECOMMBX LTD TAS S.p.A. EFIS AG Tata Consultancy Services Luxembourg S.A. equensWorldline SE IMPRINT Temenos UK Ltd Ernst & Young (EY) Advisory Services Euro Banking Association THALES DIS FRANCE SA (GEMALTO) 40 rue de Courcelles EVRY Tieto Norway AS F-75008 Paris Fidelity National Information Services (NL) B.V Token FIME SAS Van den Berg AG GRAPHIC DESIGN Finastra Visa Europe Limited Bosse und Meinhard, Bonn Fiserv Volante Technologies, Inc. GEVA Business Solutions GmbH PHOTOGRAPHS ibi research an der Universität Regensburg Johannes Haas Fotografie, Rösrath GmbH IBM Deutschland Research & Development GmbH CONTACT [email protected]

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