Technology is transforming the provision of financial services and many elements of the current financial system. All financial activities are concerned and can potentially reap the benefits of digitalisation.
Technologies such as cloud, AI and DLT help to improve existing financial services and processes, increasing their efficiency, facilitating their cross-border provision and increasing the agility of financial service providers. These technologies also support financial innovation, facilitating the introduction of new services and operating models, enhanced personalisation, as well as the reduction of time to market and barriers to entry into the market. Technologies such as AI and ML also facilitate reporting, supervisory processes and support AML and fraud detection. The COVID-19 crisis moreover shows the role that digitalisation potentially plays in terms of business continuity.
These new technologies may however pose new challenges in terms of accountability and exposure to cyber-risk and may raise issues with regard to appropriate data use, sharing and sovereignty. Their cross-border development in the EU may also be hindered by insufficient harmonisation of legal requirements. This requires taking the necessary steps to ensure the right conditions are in place to take advantage of digitalisation and manage any related risks. Several initiatives are underway at the EU and global levels to address these new challenges, e.g. with the new Digital Finance Strategy due to be proposed by the Commission.
Contributions to the policy debate
Extracted from the main Eurofi publications (Regulatory Updates, Views Magazines and Conference Summaries)