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,

constantinos herodotou : the financial ecosystem from a regulator's perspective speech by mr constantinos herodotou, governor of the central bank of cyprus, at the techisland summit, limassol, 20 september 2023. * * * ladies and gentlemen. it is a pleasure to have the opportunity to speak to you here today at the techisland summit. in this speech i will focus on the modernization and digitalisation of the financial sector and the relevant policies and regulations. introduction digitalization has spread to every corner of our lives. to accommodate our needs, the world we are living has become more interconnected and the financial landscape is witnessing a relentless transformation. the integration of technology into banking processes has unlocked opportunities, streamlined operations, enhanced customer experiences and redefined how financial institutions interact with their customers. to navigate this evolving landscape successfully, safely and efficiently, profound collaboration and solid synergies are needed between technology and the banking sector, delivering to the public a more transparent and efficient financial ecosystem. the ease of use, the speed and cost of executing transactions, are all factors that businesses and individuals take into account when deciding with whom to cooperate. the financial soundness and resilience of the cyprus banking sector the cyprus banking sector has enhanced its strength and resilience through 2023, despite the turmoil of the recent economic and geopolitical events. in particular, it has maintained a high liquidity level, with its liquidity coverage ratio standing at 318 % in march 2023, compared with the european union average of 162, 8 % ( march 2023 ). the common equity tier 1 ratio ( cet1 ) stands at 18, 9 % at the end of the second quarter of 2023, a rate which is a strong indication of the cyprus banking sector's ability to absorb future shocks. furthermore, the non performing loans in the banking sector have been reduced drastically, with the ratio declining from 44 % in 2017 to 8, 7 % in june 2023. although, with the help of regulatory measures, the cyprus banking sector has successfully weathered recent shocks, the uncertain economic environment leaves no room for complacency. banks should continue improving their balance sheets and adapting to the changing environment in which they operate. digital advancement sits at the core of this adaptation process. the new digital era, and the adoption of the convenience it provides to both businesses and personal customers, has created an unofficial mandate for banks to invest in 1 / 5 bis - central bankers '