of technological change is significant but, having said that, cash usage remains high. [ xlviii ] in ireland cash accounts for over 70 per cent of point of sale transactions although this is on the decline. [ xlix ] the number of atm terminals for example reduced from 3, 630 in 2014 to 3, 014 in 2018. [ l ] this decline is happening more rapidly in other countries. in the uk, for example, cash accounted for 34 per cent of all payments in 2017 while in sweden cash accounts for less than 20 per cent of transactions. [ li ], [ lii ] having an adequate supply of cash in the economy remains part of an effective payments system and protects the best interests of consumers. [ liii ] this will become more challenging over time as technology pushes us further away from cash. new technologies are re - shaping the financial sector, and present challenges to banks – and people – alike. many questions remain around data, cyber risks, and the resilience of the payments system. these are high on the agenda of central banks around the world. but the pace of technological change is obviously wider than payments systems. technology is not only shaping the very way we engage and interact with each other, but it is also having a structural impact on our economies. for example, artificial intelligence will have a profound impact on routine tasks, as well as relatively complex ones. however only focusing on the displacement of jobs involved in such tasks risks missing the positive welfare outcomes from the greater productivity associated with technological gains. technological improvements can boost income for workers who can increase their productivity by using machines and technology. the long - run historical evidence appears to support this view. [ liv ] financial institutions have little option but to adapt to these changes if they want to remain competitive. but they will also need to provide services to all their customers and ensure that technological change is inclusive. society has already started to adapt to these changes, if the take - up of new payment apps is anything to go by. of course the important word here is ‘ started ’. at the central bank, we have already established an innovation hub to provide a platform for us to listen to innovators in the fintech sector. in my view, the central bank has a role in helping the community understand and adapt to these changes. it is firmly within our mandate of ensuring a financial system that operates in the best interests of consumers and the wider economy as a whole. the changing financial system the fourth key transition

##elled cars ( in advance of sufficient scale in the production of electric cars ) could have a significant impact, especially for economies that are specialised in this sector. accordingly, it is now commonly accepted that climate change constitutes a material financial stability risk. this calls for ongoing monitoring of climate risks, together with the development of climate - driven scenario analyses and stress tests. by extension, the results of such analyses may call for the appropriate macroprudential policies to mitigate these risks ( d ’ orazio and popoyan 2018 ). the implementation of this agenda is not easy, in view of the data and modelling requirements to calculate the mapping between physical risks and macro - financial outcomes. x vermeulen et al ( 2018 ) provide an important example that considers a range of climate stress tests for the dutch financial system, corresponding to the various scenarios outlined above. importantly, the macroeconomic outcomes that are triggered by the climate risk scenarios are generated by a multi - country macroeconometric model, since financial firms are exposed to foreign risks as well as domestic risks. xi in this study, the authors approximate the carbon exposures in the bond and equity portfolios of dutch banks, insurance companies and pension funds ( plus the corporate loan books of major banks ) by calculating transition vulnerability indicators for fifty - six industries. xii in addition to these sectoral exposures, asset values are also affected by the shifts in risk - free interest rates associated with each scenario. the results show that dutch financial institutions would incur significant losses in climatepage 7 climate change and the irish financial system | central bank of ireland | page 8 related stress scenarios. in turn, such losses would lead to substantial declines in the capital and solvency ratios tracked by prudential regulators. accordingly, this study demonstrates the salience and feasibility of climate stress testing for the financial planning of the financial sector and the supervisory strategies of central banks and financial regulators. turning to the regulation and supervision of firms and markets, climate change poses several challenges. financial firms ( banks, insurance companies, pension funds and investment funds ) have to work out the market risks and credit risks associated with climate change. xiii even under a smooth adjustment path, the considerable structural changes associated with the carbon transition mean that historical correlation patterns will not provide a reliable guide to the future distributions of return ; this point holds even more forcefully in the stress scenarios just discussed. this uncertainty feeds into re - assessments of optimal allocation and risk management strategies in the design of equity / bond portfolio