The topic of digitalisation in financial services has, quite rightly, rapidly moved up on the EU policy agenda in recent years. With this paper, we hope to contribute to the debate by demonstrating how technology can empower consumers, enhance their user experiences and make access to financial services more inclusive.
For the financial sector, digitalisation poses challenges as well as opportunities. The need for financial institu-tions to innovate is not a one-time event, but rather a continuous process to which they have to adapt. Financial institutions need to stay agile and prepare for a world in which digital transformation comes first and change is constant. Therefore, banks have to embrace digitalisation as an opportunity: to meet their clients’ expectations, to build sustainable business models, to help start-ups develop their businesses, and to encourage cooperation between small and large institutions to address industry-wide challenges.
Digitalisation can play a pivotal role in delivering a successful Capital Markets Union, enabling further invest-ment for growth and jobs whilst ensuring appropriate levels of consumer and investor protection. The financial sector is well placed to facilitate our vision of a ‘global digital ecosystem,’ provided technologies continue to develop and are regulated in a way that promotes interoperability and unfettered access across borders.
In our Discussion Paper, we demonstrate that technological innovation is primarily driven by new client behaviours and expectations. Further, we explore the digital transformation potential and its impact on banks and their clients. Finally, we reason that Europe needs a comprehensive strategy that encourages innovation and financial and digital education, and articulate recommendations on how policy-makers and regulators can successfully transform Europe into a more competitive ecosystem for innovation that contributes to stronger economic growth.
To make this transformation successful, the EU should build on its strengths, including its long tradition of highly educated workforce and its experience in developing common EU standards. It is paramount that the EU sets a regulatory framework, which fosters innovation and promotes global cooperation.