Against this background of low profitability, banks have already made significant efforts to reduce their operating expenses, by adjusting their productive capacity. The number of banking groups has been reduced by 44% since 2007. And, from their peak levels in 2008, 3/7  the number of offices and employees in the banking industry have been reduced by 37% and by 31%, respectively. Orderly correction of the excess capacity in the Spanish banking industry has raised its level of efficiency relative to the banking systems of other European countries. However there is still room for further improvement. 2 New technologies - FinTech The second challenge facing traditional banking activity arises from the development of new technologies and entry into the banking market of so-called FinTech companies. Banks are sometimes presented as rigid, inefficient institutions, in contrast to new agile unregulated businesses, which seek to offer a better service to customers through a broad range of innovations. An extreme view is that these businesses could actually displace credit institutions from the provision of traditional financial services. In my opinion this is a simplistic, distorted view of a much more complex reality. Certainly we are facing a major technological transformation of banking activity. Permanent connectivity and the sheer number of mobile devices affect the way in which financial services are provided and used. Users increasingly demand the ability to access their current accounts and to initiate transactions at all times and in all places.

Ravi Menon: Foundational infrastructures for an inclusive digital economy Opening remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Launch of Report on Foundational Digital Infrastructures, 26 April 2021. * * * The rapid adoption of digital solutions has enhanced the economic and social well-being of millions of people around the world. But many of these solutions are not interoperable. Digital transactions are not seamless and we are not able to exploit the full efficiency benefits of digitalisation. It also means that the digital economy is not as inclusive as it should be. To create a truly efficient and inclusive digital economy, digitalisation must be end-toend. Digital innovation is not just about the number of patents or the sophistication of the algorithms. We must put people at the heart of innovation, by creating end-to-end digital solutions that will purposefully improve their lives. We need foundational digital infrastructures – systems that allow different users, different solutions, and different devices to seamlessly interact with one another. Foundational digital infrastructures will enable interoperable solutions and seamless digital services to reach more people and businesses, at lower cost and greater convenience. They will enable more pervasive digitalisation within and across economies. Just as physical infrastructures like railroads helped to advance the industrial economy, digital infrastructures will spur the growth of the digital economy. The public and private sectors must come together to co-create common digital infrastructures, and avoid the pitfalls of isolated technology solutions - ‘digital islands’ and ‘walled gardens’.