There are currently 14 authorised electronic money institutions and 10 authorised payment institutions while there are 43 pending applications (32 EMIs and 11 PIs). Compare this with the 12 local and foreign authorised banks and subsidiaries in our country. However, as with all revolutions, these global developments come with costs and risks. The number of cyber incidents reported to the ECB Banking Supervision in 2020 increased by 54% compared to 2019. Banks are specifically targeted. Banks underwent almost 26% of cybercrimes in 2019. These included compromised credit cards, leaked credentials and malicious banking applications. Banking landscape and future change The euro area banking sector is undergoing a transformation, with higher competition from non-bank financial intermediaries and Fintech institutions. The euro area's financial structure has seen a movement from strong bank dominance towards a more balanced composition1. The development of non-bank lending diversifies the sources of finance available to businesses, providing competition to the banking sector. 1/4  BIS - Central bankers' speeches  As a result, Credit institutions need to adapt to the unfolding competitive landscape. The ongoing digitalisation of society at large, coupled with the changes in the way people work and conduct their purchases because of the pandemic, force the banking sector to adapt to a new way of conducting business. In addition, the low profitability challenge that European banks face, exacerbates the need to adjust and acts as a catalyst for the already strong competition banks are experiencing from Fintech and the non-bank financial intermediation firms.

Since the global financial crisis, the euro area banking sector has been going through a gradual restructuring process, which involves the search for new business models, the adjustment to the revised regulatory regime, consolidation and the resolution of nonperforming assets3. In fact in 2020 the number of completed mergers and acquisitions in the banking euro area increased even though this type of M&A had been decreasing since 2010. In an effort to further contain costs and consolidate the banking sector, the number of euro area banks and branches has continuously declined by approximately 30% since 20084. Incumbent banks must restructure and improve on technology and efficiency simultaneously with the entry of new competition also from Bigtech. Technology giants are entering financial services as their next related business. Global technology giants have built extraordinary market advantages: large and engaged  2/4  BIS - Central bankers' speeches  customer network; huge data enabling robust and increasingly precise understanding of individual customers, experience in scaling innovative technologies and because of their size, access to low cost of capital. BigTech players have already gained a foothold in financial services in select domains such as payments and in some cases lending and insurance. However, digitalisation also poses significant financial and operational risks, both in the banking sector and in the Fintech / BigTech companies, themselves. The Financial Stability Board5 has recognised a number of operational risks, including: 1. Operational risks of third-party reliance that are transferred to banks.