technology to analyse so - called big data i. e. the analysis at great speed of a massive volume of data also generated at great speed and obtained from many sources. there are businesses that, with this tool, are capable of analysing or predicting customer behaviour using a large amount of unstructured information. this technology has many applications in the field of banking. in fact, one of the main assets of credit institutions is the information they have on their customers. properly harnessed, this information would enable them to better know their risk profile and their preferences and needs, and thus to adapt the offering of financial products for the benefit of both parties. moreover, banks have an invaluable asset, namely the confidence of bank customers in the confidentiality of their transactions which, as i will mention later should be nurtured and properly valued. the same could be said about cloud computing technologies, which enable the information systems of all kinds of businesses to be adapted flexibly to their changing needs, converting a large part of their fixed costs into variable costs. this technology may notably reduce the costs for banks of their information systems, which, precisely due to the use of new technologies, are growing rapidly, although there are security risks that must be controlled. another example are mobile payment services. these may seem new, but ultimately the transaction usually ends with an interbank transfer or a simple credit or debit card payment. spanish banks have been pioneers in the euro area in the incorporation of this technology 4 / 7 through the bizum platform, an interbank initiative for immediate payments, allowing payment to be made from one account to another in a matter of seconds. the list of technological developments available to credit institutions is longer. to mention some more, i would also point out the new methods to validate identity by means of voice or image, which make it possible to identify and register new customers remotely, bypassing the traditional branch network ; or the provision of automated advisory services, known as “ robo advice ”, which enable advice to be provided in areas where just recently it was impossible to imagine that automated solutions could be developed. 2. second, the development of new services will require regulation in accordance with the risks they introduce into the system, both in terms of customer protection and the stability of the financial system. in fact, new competitors are specialising in specific parts of the value chain of banking business, beyond deposit - taking and payment service provision, which are activities reserved for authorised institutions

been accompanied by an equivalent reduction in the perception of the riskiness of banking business, so that its cost of capital remains high and exceeds its profitability. moreover, the stricter prudential requirements are compounded by the obligation to comply with the new resolution regulations, which requires banks to have a minimum level of liabilities enabling losses to be absorbed should this be necessary ( mrel ). again, complying with this minimum volume of liabilities will not be cheap and may in fact be particularly difficult for those banks which, as a consequence of their business model, do not have the necessary experience of issuing this type of instrument. against this background of low profitability, banks have already made significant efforts to reduce their operating expenses, by adjusting their productive capacity. the number of banking groups has been reduced by 44 % since 2007. and, from their peak levels in 2008, 3 / 7 the number of offices and employees in the banking industry have been reduced by 37 % and by 31 %, respectively. orderly correction of the excess capacity in the spanish banking industry has raised its level of efficiency relative to the banking systems of other european countries. however there is still room for further improvement. 2 new technologies - fintech the second challenge facing traditional banking activity arises from the development of new technologies and entry into the banking market of so - called fintech companies. banks are sometimes presented as rigid, inefficient institutions, in contrast to new agile unregulated businesses, which seek to offer a better service to customers through a broad range of innovations. an extreme view is that these businesses could actually displace credit institutions from the provision of traditional financial services. in my opinion this is a simplistic, distorted view of a much more complex reality. certainly we are facing a major technological transformation of banking activity. permanent connectivity and the sheer number of mobile devices affect the way in which financial services are provided and used. users increasingly demand the ability to access their current accounts and to initiate transactions at all times and in all places. however not all the initiatives that have arisen in response to this demand have the same impact on banking business. allow me to introduce some nuances. 1. first, it is important to understand that, rather than projects that directly compete with banks, some of these technological innovations are in fact operational tools or improvements that credit institutions can incorporate into their own operations. without giving an exhaustive list, this would, for example, be true of the use of