Society is evolving by leaps and bounds towards a new world dominated by technology. Digitalisation, understood as the penetration of the internet into our lives, is a fundamental part of this process. It is so because it shapes how we act and how we think. As a society, we are facing the greatest innovation process in our recent history. Few people are still unaware of it, and there are also few sceptics who do not appreciate the enormous benefits brought by the digital revolution.
Banks are a key part of this innovative process that is the digitalisation of society. It makes no sense to think of a digital economy and society without banks. What is more, banks can be a catalyst for the modernisation and digitalisation of the economy. However, it is important that the authorities rise to the challenge of promoting innovation. The Sandbox is undoubtedly a good step in this direction. This is an important tool that helps the financial sector and the economy as a whole move forward. The resulting projects can help improve the quality and availability of the financial services demanded by end users. Regulation should never hinder innovation or become an obstacle preventing banks from fulfilling their ultimate purpose of financing development and providing the best possible service to customers. As a society, we should aspire to a national strategy in support of innovation in which banks and the rest of the financial sector play a key role.
Customers demand from banks the same things they ask for in other areas of their lives: agility, efficiency, ease and security. Financial innovation benefits customers by enabling them to access a wider range of products and services, improving comparison between institutions, and providing them with up-to-date information and tailored offers at lower cost. In short, digitalisation drives transparency and competitive offerings of higher value-added products and services. It is all beneficial for banking customers, in an environment of security strengthened by banks, which explains the exponential growth in digital customers and why digitalisation is a priority for our institutions. Banks are making significant investments in technology, in their infrastructure and in their adaptation to the digital world to continue improving the customer experience. In this dizzying digital transformation, employees remain banks’ main asset by maintaining the personal, trust-based relationship with customers—the raw material of all banking activity.
The business environment for banks has ceased to be recurring and predictable. In addition to the digital era, banks face major challenges arising from relentless and complex regulation, as well as business difficulties in a scenario of zero or negative interest rates. Institutions must develop their strategy in this complex environment, but they are used to finding opportunities where others see risks.
Digitalisation facilitates competition in the provision of financial services, and regulatory changes have opened the door to operators that are not banks. Two types of entities embody the new banking competition: start-ups and big tech. The former, known as fintech for applying technology to the provision of financial services—as banks do—are sources of innovation that collaborate with banks and even emerge under their umbrella. The second group is made up of large technology companies, leaders in other sectors, that see opportunities in some profitable segments of the banking business. The key in this scenario is that competition benefits consumers and that their adequate protection is guaranteed. To this end, it is essential to ensure that the same activity is subject to the same regulation and supervision, regardless of who carries it out. The same principle of fair competition must also govern the exchange of information between traditional operators and new players.
