guidelines. looking further ahead, i would like to see the european stakeholders set the right course for the overarching framework of digitalisation. first, cross - border business will be even more relevant in the digital age. a key concern for banks and finechs is that their innovative products and services can be rolled out across europe straight away. here, the eu should focus on counteracting any national fragmentation of regulation in its early stages. this is also important for europe ’ s global competitiveness in areas such as artificial intelligence, blockchain technology, video identification or even issues relating to competition law. second, the eu could set its sights on objectives beyond strengthening the single financial market. regulatory issues brought to light by digitalisation often also have a more far - reaching impact. for instance, the framework for using artificial intelligence also raises ethical questions. considering topics from various angles appears to be something the eu is good at – in any event, eu regulation is often seen as being very well balanced from outside the european union. other countries and jurisdictions have already chosen to model their own projects on the european data protection regulation. i therefore see a very real chance that the eu could end up playing a leading role in developing the rules for the digital financial sector. expectations of this have already emerged, in fact. in the new legislative period, we should therefore be proactive in tackling pressing topics and questions. 5 conclusion ladies and gentlemen, digitalisation is about to bring about a fundamental transformation of the financial markets. so it can ’ t be a matter of blocking or preventing developments. instead, it should be the task of legislators, supervisors and market participants alike to shape these developments. even if these developments cannot be stopped, digitalisation will ultimately be what we make of it. we can encourage and support these developments by : 5 / 6 bis central bankers'speeches taking a broad - based, open approach to the way we think about and tackle digitalisation ; raising awareness of the fact that risks can change and shift at any time ; and creating a framework for future developments that does not limit potential opportunities and, at the same time, appropriately reflects risk. a new debate has begun. 6 / 6 bis central bankers'speeches

is the supervised institutions that bear full responsibility for any risks arising from cooperation with an external service provider. examples of such risks are a potential default by the external service provider, or the possibility of reputational risk. the institutions must ensure that the risks remain manageable – for instance, by including relevant terms and conditions to this effect in cooperation agreements and by considering from the outset how they can keep their business up and running if the partnership is terminated unexpectedly. so this sums up the conditions de jure. but are they always appropriate to the economic conditions? depending on the individual case, the picture can be very different. where credit institutions work with large technology firms, such firms ’ negotiating power might be so large, for instance, that institutions have difficulty effectively imposing their conditions on their contracting partners for the service being provided. you might call this “ the tail wagging the dog ”. 4 / 6 bis central bankers'speeches we also have to make sure that it does not make sense to outsource certain tasks simply because you can afford to be more relaxed about dealing with the resulting risks outside the regulated enterprise. the more the boundaries between sectors are blurred and the more intensively banks work with non - licensed enterprises, the more relevant discussions like this will become. my personal view is that we should discuss to what extent we might take a closer look at supervising individual activities – activity - based supervision – in addition to entity - based supervision. i am thinking here, for instance, about services provided by insourcers of a certain size and importance, such as cloud service providers. however, this would have significant repercussions – not least for supervisors. so that ’ s why it ’ s crucial that the debate does not take place in a vacuum, but always with a view to what is necessary and essential in order to tackle the key risks effectively. we are still in the early stages of this debate. in any case, the entity - based supervisory approach should remain unaffected. we cannot start to define areas where an institution is relieved of its responsibility for risks that ultimately affect its own services. this would pose a problem not just from the point of view of effective supervision, but also in regulatory terms. i also see a european dimension here. europe is already pressing ahead with regulation for issues emerging as a result of digitalisation. i am thinking, for example, of the eba ’ s recently issued guidelines on outsourcing arrangements. the bundesbank and bafin helped to draft these