European Securities and Markets Authority oversight signals a shift for EMIs, as standardised reporting demands stronger data infrastructure, governance, and technical readiness.
In the world of financial regulation, change is often accompanied by uncertainty, and clarity comes only after adaptation. This cycle is best known in the European financial industry, though the latest news marks a significant turning point. The European Securities and Markets Authority’s increased supervision of Electronic Money Institutions is a huge change for many in the sector that few have realised.
And I think that while the new regime was touted as another level of supervision, it turns out to be a structural revision of how companies will gather, validate, and leverage compliance data. And as with prior regulatory changes, the danger is not that the regulations won’t stand up on paper—the big problem is being technically unprepared for them in practice.
The background: Why this is a turning point
Over the past decade, EMIs have grown rapidly across Europe under the guidance of digitalisation and a harmonised regulatory framework. But behind this growth has been a fragmented reporting system, making it difficult to track progress. Different competent national authorities have not only issued the same directive in different ways, but also produced the same inconsistencies, which regulatory authorities can no longer overlook.
This is where ESMA steps in. Its expanded mandate is not intended to replace existing regulators, but to achieve consistency in how data is reported and interpreted across the EU.
Whereas the EBA continues to oversee core prudential aspects, ESMA is taking on transparency, data quality, and systemic visibility. As EMIs grow increasingly enmeshed with financial markets and payment ecosystems, the quality of their reporting becomes a critical issue for the economy as a whole. Regulators want comparable data—and not pieces that need interpretation. When it comes to reporting—once decentralised—the only difference is what’s becoming harmonised. Previously, EMIs could manoeuvre around a number of national frameworks. Now they may have to conform to a single standard that provides far less room for interpretation.
The technological turn no one talks about enough
The real issue is not regulation: It is technical. With standardised templates, common taxonomies, and strict validation requirements, data cannot be refactored at the reporting stage. It must come from the right place.
I have witnessed how institutions now handle reporting. In many instances, it is still a layered process—data is collected from multiple systems, manually configured, and then formatted for submission. Such an approach could hardly apply under ESMA’s model. Structured data formats such as XML are not just a formatting requirement—they are a signal that reporting is becoming more machine-readable, automated, and instantly comparable. This means a total rethink of how data is moved throughout an organisation.
A practical roadmap for EMI leaders
I believe the first step is to ensure data readiness. Not high-level data, detailed data. Are your systems good at generating consistently structured, well-validated data without manual intervention? If the answer is unclear, there’s already a risk.
Second, technological investment is no longer a matter of choice. RegTech solutions, integrated data platforms, and automated validation tools will determine whether an EMI meets ESMA’s expectations.
Third, governance must evolve. Data ownership, accountability and traceability need to be clearly defined across the organisation. Without this, even the best systems are doomed to fail at a regulatory review.
Finally, engagement with regulators is more important than ever. Those who attend consultations, pilots, and working groups can gain clarity and adapt more quickly. It’s not a plan to wait for final instructions – it’s a delay.
The biggest mistake an EMI can make today, I suspect, is to present this change as a reporting exercise. It is not true. It is an entirely new way to generate, manage, and trust data within your institution. And those who realise this early will not only succeed but also establish stronger, more resilient businesses. Those who won’t will instead feel always reactive, always trying to rectify flaws in systems that were never built for this kind of scrutiny.
