The digitalisation of payment transactions, for instance, has helped to make cashless payments cheaper and simpler for customers – even if efficiency could still be further improved, especially where cross-border payments are concerned. The advent of dematerialised securities years ago is another example of innovation within the financial industry; this change greatly increased the efficiency of securities settlement and safekeeping. The digital transformation has also added value in another way: it has enabled bank customers to execute transactions with greater temporal flexibility and geographical independence. These days, traditional bank counters have morphed into apps that live on our smartphones. Such useful innovations have the potential to improve aggregate economic welfare. The challenge for regulators and central banks is to make sure they fully understand the effects – and side-effects – of these new mechanisms at an early stage. The same goes for innovations affecting financial market infrastructures – especially those that are systemically important. Such assessments of new technologies are based on a set of internationally accepted guidelines called ‘Principles for financial market infrastructures’. 2 These principles define the criteria that infrastructures must meet, thereby setting standards for innovation in this field. Central banks and regulators have a duty to pass legislation guaranteeing the safety of financial market infrastructures – by protecting their stability, resilience and availability, irrespective of technological change; but they must also take on board the efficiency goals of infrastructure providers and their participants. Regulatory adjustments may be needed to catalyse the positive effects of certain innovations.

The city of Zug has recently even launched a pilot project allowing certain public services to be paid for using a crypto-currency. But even those of us who prefer more traditional payment methods can benefit from many innovations in Switzerland. For instance, cash can now be withdrawn from ATMs without a bank card – simply by using a smartphone. Like Switzerland, central banks are associated with stability and continuity. And yet, since the financial crisis, they too have had to adopt ever more inventive policies to shield their respective economies from serious harm. The Swiss National Bank has likewise had to mobilise its innovative resources. We have developed and deployed new monetary policy instruments, which have enabled us to carry out our mandate as fully as possible. When it comes to implementing monetary policy, financial market infrastructures are vital. In Switzerland, these infrastructures are run by SIX Group and the SNB is actively involved in shaping the strategic direction of certain functions. Without safe and efficient infrastructures we would be unable to fulfil our mandate. This fact alone explains our keen interest in ensuring their smooth operation. But our interest goes beyond monetary policy implementation. The infrastructures also play a major role in enabling the SNB to perform other statutory duties, such as facilitating and securing the operation of cashless payment systems and contributing to the stability of the financial system. As mentioned, the financial sector is experiencing a surge of innovation.