Digital transformation continues to reshape the global financial industry and will do so for years to come. Cutting-edge technologies such as artificial intelligence and robotics, cloud computing, distributed ledger technologies, big data and semantic technology are being adopted at an increasing pace everywhere from client-facing activities to the mid- and deep into the back-office.
New, digital-based market entrants are scrambling the competitive environment. Risks in areas such as data and cyber security have increased the need for close dialogue between the industry and the authorities. Consumer preferences are changing, which becomes apparent in the increased use of mobile banking, especially among young consumers. These global drivers will influence how financial institutions and new players deliver financial services to the next generation. In this year's Discussion Paper “Getting ready for the ‘20s – Technologies and the Future of Global Banking”, we examine the changes in how people consume financial services and invest, and how banks operate in an environment of rapidly evolving digital innovation, based on insights at large international financial services providers as well as from the dialogue with EU and international public authorities. Some developments were already flagged in our previous Discussion Paper “The EU and its Partners: Banks and Investors in a Digital World” back in 2017. We examine what has changed and where we stand today. Based on our findings, we formulate policy recommendations aimed at harnessing the potential of new technologies to benefit consumers and, ultimately, sustain economic growth. Key among these considerations are 1) the need to enhance planning and legal certainty for all market players; 2) to create a level regulatory playing field based on global standards enabling sound competition; 3) the elimination of unintended regulatory side effects that penalise European banks’ investments in new technologies; and 4) enabling broader use of cloud technologies, without jeopardising data security. These considerations are intended to contribute to the discussion about a forward-looking, digital-ready regulatory framework for a strong European banking industry that benefits savers and investors. We hope this Discussion Paper will stimulate further discussion on how to maximise the benefits of technology in the ‘20s and deliver them to consumers, businesses and the broader economy.