But, further to digital transformation, significant changes are afoot in the business models of traditional institutions, and in the role that other agents from different sectors play, in relation to the provision of financial services. As regulators, we should seek to ensure this transition is orderly, maintaining at least the existing levels of stability and the safeguards set in place following the financial crisis. In this respect, if anything characterises the new scenario, it is the growing importance of data as the source of a competitive edge. Technological development has given rise to an unprecedented transformation in the capacity to capture, store, process and analyse information. Unquestionably, this is one of the basic reasons it was decided to liberalise the exchange of certain pieces of financial information in Europe. And it is also why other jurisdictions (Australia, for example) appear to be following the example. It is in this new competitive context, where data on payment transactions circulate more readily, that it is important for banks to take the necessary steps to ensure the security and privacy of the information that is shared. Also, aspects such as data governance, differentiated treatment in terms of their nature and defining where individual data end and where those processed by banks begin are all issues that need to be resolved. Indeed, a far-reaching debate looks likely. 7/9  In any event, in the European Union this debate should not be tackled in a fragmented fashion, with national-based differences.

That would increase the capacity for stabilisation in the face of turmoil and would, at the same time, weaken the link between sovereign and banking risk. Regulatory challenges in the new technology environment Following these thoughts on the recent development of and future prospects for Banking Union, and its consequences for the financial system and financial stability, I shall devote the last part of my address to highlighting a number of regulatory challenges emerging in the financial sector’s new technology environment, in which new players, technologies and services have appeared. The digital transformation process is characterised by its high technology component, with applications that are accessible to society at large, and by the speed at which innovations are introduced. In this setting, it is no surprise that banking intermediation, which largely depends on exploiting information asymmetries, has viewed this revolution with a mixture of concern and interest. Concern because of the difficulties involved in adapting to the new environment and competing with the new market players (especially bigtech, which I mentioned earlier). Interest, because of the possibilities it offers to achieve synergies, improve the range of services on offer and secure efficiency gains in numerous internal processes. First, digital transformation offers significant potential advantages to companies, be it thanks to efficiency gains, progress in financial inclusion levels or the possibility for different intermediaries to better meet each customer’s needs. 6/9  However, as in any other transformation process, there are also new and important challenges to be addressed.