denis beau : what role should banks play in the twin digital and climate revolution? speech by mr denis beau, first deputy governor of the bank of france, at the conference at the jean monnet university, saint - etienne, 15 april 2022. * * * accompanying slides can be found on the bank of france website. [ slide 1 ] students, faculty, ladies and gentlemen, we now have sufficient distance to say that, if the health crisis unleashed by covid - 19 was not compounded by a financial crisis, this was in part because our prudential framework has made banks considerably more resilient. the new framework, coupled with the exceptional support measures introduced by governments and the european central bank ( ecb ), enabled banks to continue financing businesses during the health crisis. today, it is enabling them to cope with the economic and financial impacts linked to the war in ukraine. that being said, for this new architecture to be consolidated, the basel iii accord still needs to be fully implemented in a manner that is fair, reasonable and definitive. yet this strengthened abilities to withstand shocks cyclical crises must not blind us to more structural vulnerabilities, which the health crisis has helped to amplify, i am thinking in particular of digitalisation and the transition to a sustainable economy. these two transformations present banks with a twofold challenge : on the one hand, they are exposed to and must protect themselves against the intrinsic risks associated with these developments ; on the other, they have to act, because they have a role to play in these transitions, particularly on the financing side, with government backing. 1. the banking sector and the transition to a digital future and a sustainable economy let us begin by diagnosing the situation. the banking sector is currently facing the twin challenges represented by the digital and green transition. these have the potential to weaken banks but also the wider financial system, and could ultimately impact the real economy. 1. 1 vulnerabilities in relation to the digital transition [ slide 2 ] from blockchain and artificial intelligence to electronic payments, the cloud and big data, the growing digitalisation of banking and finance represents a multi - faceted evolution that is changing how banking has traditionally been done. we can pick out three broad shifts that characterise banking ’ s digital transformation and that are impacting the industry ’ s business model. first, customers have new expectations in terms of digital services. i am thinking here in particular of greater accessibility to tools to manage

denis beau : the digitalisation of the financial sector - new challenges, new levers closing speech by mr denis beau, first deputy governor of the bank of france, at the 4th assises des technologies financieres, 30 september 2021. * * * ladies and gentlemen, i would first like to thank the president, eric woerth, for inviting me to close these 4th assises des technologies financieres, and to provide my insight, as a central banker and supervisor, into the challenges posed by the digitalisation of financial services. in the framework of our mission to safeguard monetary and financial stability, the main issue for the banque de france is how we can facilitate and accompany the digitalisation of the financial sector, which is a source of efficiency gains, while at the same time preserving the stability of our monetary and financial system. in order to present the concrete responses we are trying to bring to this issue, i shall start by reminding you of the new challenges posed by digitalisation to the safety and efficiency of the financial sector, before describing the three main areas where we are working to respond, in line with our mandate. i. the digitalisation of the financial sector poses new challenges a ) in terms of security, one of the main concerns raised by the current digital transformation of the financial system is it or cyber - risk. the digital transformation considerably increases financial system participants ’ surface area of exposure to cyber - threats, and hence their vulnerability to such risk. this stems in particular from their internal transformations, which rely in large part on the development of open - platform it systems and on greater use of it outsourcing, especially via the cloud. the public health crisis has significantly amplified this exposure : the widespread use of remote working has been accompanied by a massive roll - out of new collaboration tools and new software. this ( sometimes hasty ) deployment of third - party software and new methods of labour organisation has amplified the overall vulnerability of the sector. the need for vigilance is being even further heightened by the fact that cyberattacks are evolving constantly and becoming increasingly sophisticated. on a technical level, this phenomenon can in part be explained by the diffusion of “ turnkey ” hacking tools and a general increase in computer skills. on an economic level, the huge financial rewards to be gained from attacks is leading to a surge in the number of potential hackers. this dual trend has taken cyber - risk into a whole new dimension : at the company level, it represents a