Ernst and Young adoption index for 2017 highlights the impressive and rapid growth in adoption of fintech services among mature and developing markets with highest adoption rate among younger generations (25–34 years). On average, about 33% of digitally active consumers have used at least two fintech services in the last six months (compared to just 16% two years ago), with payments and money transfer being the most popular segments (used by 50% of digitally active consumers). Perhaps even more importantly, there is an increasing awareness: 84% of customers are aware of fintech services compared with 62%, two years ago. Thus, rising investments in fintech segment, as well as growing awareness and adoption of fintech services 1/4  BIS central bankers' speeches  indicates that fintechs are embraced and will continue to gain momentum in the future. Financial innovations change the environment not only for customers, but for traditional banking industry and policy makers, as well. Customers may benefit from increased and cost effective access to financial services, although in some instances at the cost of privacy and consumer protection. As for traditional financial institutions, such as banks, they may face strong competition by new entrants, on the one hand, but may benefit from increased cost efficiency, competiveness and ability to offer new state-of-the-art services, on the other hand. The impact on policymakers and regulators is also large, as they have to first properly understand innovations/new services, foresee possible consequences for financial intermediation and stability, and react in a timely and proper manner.

On the other hand, regulatedprice goods and non-food goods had a low and downward contribution to this month’s inflation. In line with Bank of Albania’s expectation, controlled inflationary pressures by the domestic economy, as well as anchored inflation expectations created a favourable environment for a rapid reduction of imported inflation effects. Consumer prices during 2011 were mainly affected by supply shocks, materialised in higher prices of imported goods and some products subject to excise, or with regulated prices. These effects appeared to be more moderate in July; in the absence of sudden shocks, they are expected to decrease further in the months ahead. Below-potential economic growth continued to generate controlled inflationary pressures on the demand side. Hence, core inflation stopped increasing and is set around the Bank of Albania’s target of 3%. Moreover, stabilisation of inflation expectations of economic agents and the prudent policy of the Bank of Albania regarding their anchoring are reflected in moderated second-round effects on inflation. (Following, I will describe in more detail economic highlights defining the inflation performance and their expected development.) Although in an unfavourable external environment characterised by added uncertainties in our trade partners, the Albanian economy continued to grow during the second quarter of 2011. In the absence of direct data, the Bank of Albania deems that economic growth during this period is similar to the one recorded in the preceding quarter, thus remaining below Albania’s potential growth rate.