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The EU has an unusual IT strategy. While the US prioritizes the growth of global tech giants, the EU focuses on being the sector’s leading regulator.
In the year In 2022, the group introduced two tough new laws: the Digital Markets Act (DMA), which aims to strengthen competition in online services and the Digital Services Act (DSA), which aims to protect people from harm online. Analysts expect the regulatory drive to accelerate next year.
“The only thing we can be sure of is that next year there will be more regulation and increased regulatory enforcement,” said Alan Calder, the company’s chief executive. GRC International Groupa global provider of IT governance, risk management and compliance solutions.
To gauge the detail, TNW asked IT professionals from across the bloc what they predict from EU policies in 2023. All expect significant changes in the law, with some technologies particularly prominent in their assessment.
Strict security
Our experts anticipate significant developments in cybersecurity regulation. Kostas Rosoglou, Shopify’s Head of Public Policy and Government Affairs for EMEA and International, highlighted the importance of the Digital Operational Resilience Act (DORA).
The recently passed regulation aims to streamline the financial sector’s approach to cyber security. In order to comply with the rules, organizations must review legacy IT systems and invest in potential investments in new software. This could be costly in the short term, but Rossoglou is optimistic that it will pay off. It expects security standards to increase, thereby limiting attacks, reducing downtime and saving money.
Although mandatory compliance is still a few years away, it will ultimately put financial institutions in a much stronger position to manage disruptions, breaches, unauthorized access and data loss, he said. “This is incredibly important given the highly sensitive data the financial sector holds.”
“It’s not too quick to realize.
Another is the Cyber Resilience Act, which works through the European Union. This regulation sets cybersecurity requirements for connected devices, providing users with transparency on operations, testing, and general operations.
The law is currently in the consultation process. Rosoglou advises organizations to closely monitor its progress over the next year.
“It may be a year or two before it is completed and then organizations will be given a 24-month transition period to comply,” he said. “However, it is not too soon to know about future changes. Regular monitoring for updates ensures that businesses are ready for the changes in good time.
Of course, these arrangements can be very important. Calder predicts that new EU rules will be accompanied by stronger enforcement.
As the EU Commission moves to compel organizations to adopt cybersecurity measures that they have failed to take voluntarily, the entire cybersecurity sector will face significant changes, particularly in terms of regulatory and regulatory enforcement.
Algorithm accountability
The European Union is developing a new artificial intelligence regulation based on the technology’s potential to cause harm. Dubbed the AI Law, the law requires anyone in the EU who wants to use, build or sell AI products and services to follow the rules.
“The law is expected to serve as a model for other jurisdictions to improve or follow,” said Matt Peek, director of global public policy at the ID Verification Organization. Onfido. “The framework is designed based on risk, so the level of control depends on the level of risk.”
according to Global survey by Accenture, the rules will have a profound effect. 95% of respondents said that at least part of their business will be affected by EU legislation.
Accenture researchers expect a risk management framework to be essential to complying with AI legislation. They also predict that the regulation will be approved before the end of 2023, with a two-year grace period before the rules go into effect. That schedule, however, may be less generous than it appears.
“Our experience working with large organizations on major enterprise-wide compliance programs (e.g. GDPR, Responsible AI) indicates that it can easily take up to two years to comply with all necessary controls,” the research team wrote. In a report.
Follow the money
Cryptocurrencies are becoming the focal point of technological control. The ever-increasing controversy in the European Union has led the Union to issue a new law for the sector.
“I think 2023 will be a critical year for crypto regulation,” said company founder and CEO Ivan Lilleqvist. MoralityWeb3 API provider.
Liljeqvist emphasizes the importance of the market in Crypto Assets (MiCA) accounting. In February, the European Parliament is expected to vote on the law – the first comprehensive crypto regulation on the continent.
With Big Tech entering the Web3 and Metaverse, competition is likely to heat up over the next few years – potentially inviting more regulatory scrutiny. The EU has recently introduced the Markets in Crypto Assets (MiCA) Act, but even insiders from the EU Commissioner agree that some of the phrases around NFTs are ambiguous and even disagree. Straight wrong.
The proposals could be crucial to the European Commission’s future digital finance strategy. In addition, they can provide a reference point for other regulatory bodies.
“While the legislation is unlikely to come out until the end of the year, I think the expectation every time we meet with lawmakers is for lawmakers to be cautious and overly regulatory,” Lilleqvist said.
“What I would like to see, and what I think others in the market would like to see, is sensible regulation rather than protecting the principles of innovation and competition. I believe that the most important thing is that the bill is open-minded and flexible so that it evolves as markets evolve.”
Lilleqvist was not alone in expressing caution. Jake Stott, CEO of Web3 creative agency Hypeis concerned about the impact on the market.
“As tech behemoths such as Meta, Reddit, Google and Apple continue to venture into Web3 and NFTs, the regulatory environment will quickly escalate and lead to more uncertainty in the market.”
“They have to move at a faster pace.
Some critics, however, argue that the EU should be quicker to regulate the sector. Martin Magnon, co-founder and CEO of the credit company smokingHe believes the new law will only start having an impact in 2024.
“If the European Union is to successfully maintain a strong position, they must move in line with industrial activities,” he said.
Opening access
The payments sector, meanwhile, is gearing up for the European Commission’s review of PSD2, the EU regulation for online transactions.
Industry insiders have high hopes for the review, which is slated for 2023. They believe it will enable European SMEs and consumers to get better payment results – at better prices.
Under current regulations, only credit institutions can access European payment schemes. As such, non-banks and many innovative firms will have to bypass traditional banks to benefit from the scheme.
“This creates dependencies on credit institutions and their legacy systems; single points of failure; and increases the cost of payment services provided by non-credit institutions to European SMEs and consumers,” said Elani Stein, director of operations at the payments platform. module.
“If the PSD2 review were to consider which institutions could directly access European payments, the impact could be seismic. Opening access has the potential to level the playing field, create greater competition and reduce payment costs for all Europeans.
Indeed, many experts we spoke to expect the EU to prioritize open access.
“The main focus of the European Union for 2023 will still be Big Tech platforms and achieving their goals,” said Timit CEO. Martin Magnon.
“From labor laws to taxes, the measures proposed so far to control the monopolies of big tech companies have been partially effective and still have not brought the desired results. In 2023, we will see the EU taking further steps to fix this and achieve its open access goals.”
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