of a digital euro. instant payments are a major technological innovation. they allow the release of funds that are locked in the financial system, making them immediately available to consumers and businesses. today, the clearing and settlement of payment instructions takes a few days according to the payment instrument in use. for example, cheques 2 / 5 bis - central bankers'speeches and cards take up to 3 days, single euro payments area ( sepa ) credit transfers 1 day and for cross - border payments the time taken is even longer. this offers opportunities for banks and fintechs to develop new solutions at physical points of sale or in ecommerce transactions. at the same time, instant payment solutions should comply with customer and data protection, anti - fraud, anti - money laundering and sanctions legislations. the deployment of instant payments has been rather slow so far : from november 2017, when the sepa instant credit transfer scheme was launched, till the second quarter of 2023, instant payments reached about 15 % of total volume of credit transfers in the eu. this is a challenge we have been addressing in the eurosystem's retail payments strategy and in our deliberations with the european legislator. the latter intends to make instant payments available to all holders of a bank account in the european union ( eu ) and in parallel make them affordable, such that the price charged for instant payments does not exceed the price charged for traditional credit transfers. although cyprus banks do not yet offer instant payments, certain electronic money institutions and payment institutions that are regulated by the central bank of cyprus are eligible to offer this service to their clients. without a doubt, consumers'demand for innovative payments poses a number of challenges. for instance, non - european bigtechs provide front - end solutions to customers, such as stablecoins and applications for making payments, which challenge our strategic autonomy. this is because of the increase in the risk of financial transactions being based on technologies and infrastructures owned and managed outside the eu, with limited powers of intervention or protection by european authorities. bigtechs also pose a challenge to our competitive edge, because the information contained in digital transactions can be monetised by private, non - european companies, thereby posing a threat to privacy, while also exploiting it for commercial use. another challenge lies in safeguarding in the digital era the availability and usability of banknotes and coins that are currently the only kind of central bank money available to the public. it is against this backdrop that the euros

constantinos herodotou : fintech evolution in the banking system and managing consequent risks address by mr constantinos herodotou, governor of the central bank of cyprus, at the annual general meeting of the association of cyprus international financial firms ( aciff ), nicosia, 8 december 2021. * * * the pandemic has highlighted the importance that technology plays in allowing the financial system to continue, as smoothly as possible with its operations. global fintech investment continued its remarkable growth, rising from $ 87 billion in h2'20 to $ 98 billion in h1'21. global fintech deal volume also hit a new record of 2, 456 during h1'21. data also shows that consumers worldwide are adopting fintech services much more quickly than anticipated. in 2017 it was predicted that 52 % of consumers worldwide would have adopted fintech services by 2019, but the estimate proved to be too conservative as the actual figure overshot it by 12 points. this overshooting happened before the pandemic. although data is not yet available, the recent health crisis must have accelerated further this figure. the growth in the fintech market is also obvious from the number of fintech startups. as of november 2021, there were 10, 755 fintech startups in the americas, making it the region with the most fintech startups globally. in comparison, there were 9, 323 such startups in europe, the middle east, and africa and 6, 268 in the asia pacific region. cyprus is no exception to this global trend. 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,