The digitalization of the economy has become a multiplier and accelerator of economic growth to a degree inconceivable just a few years ago. Its contribution, by breaking down barriers between people and markets, is decisive for the globalization of societies and competitive innovation. All of this translates into the generation of new business models and new employment opportunities, which require new professional skills as well. <\/p>\n
In Spain, the digital economy represents around 20% of GDP, below the global average of 22%, and far from the 37% it contributes to the GDP of the United States. These figures clearly show that digital development must become an urgent and priority task for our authorities and companies. Unfortunately, not everyone is aware of the urgency of this project, without which our own Welfare State may be at risk. <\/p>\n
This is not the case for Spanish banks, which have this objective very clear, as demonstrated by the enormous economic and human resources they have been investing for years in the digitalization of financial activity. Indeed, banking in Spain, as is happening in the rest of the world, faces a change that requires a new way of operating and relating to customers and competitors. This transformation is driven by two factors. On the customer side, who want to interact with banks in a different way\u2014easier, more dynamic, and transparent. And on the part of regulators who are opening the banking sector to competition from new operators from the digital world. This is what they have done with the second Payment Services Directive, known as PSD2. Curiously, this regulation allows technology companies to access the data that banking institutions have on their customers, but the same does not happen in the opposite direction. This is an asymmetry that must be corrected so that all companies, at least from a certain volume of operations, are governed by the same rules. Banks welcome competition, but on a fair and level playing field. <\/p>\n
A distinction must be made regarding new operators. On one hand, there are fintechs, which are usually agile, innovative, and potentially very efficient companies that are providing a stimulating boost to the banking sector. Their competition is in many cases welcome\u2014although certain regulatory asymmetries need to be corrected\u2014and cooperation agreements between these entities and traditional banks are frequent. On the other hand, we find the financial activity that large technology operators, the big techs, have begun to deploy, which are already posing a serious competition problem with their dominant position in the global distribution market, and not only to the financial industry. Competition must guarantee equal opportunities for all companies, variety of supply, consumer data protection, and restrict the capacity of large corporations to generate network economies. All of this is threatened by technology giants that, making use of the information they have on their customers, can enter any sector of the economy, particularly certain segments of financial activity\u2014the most profitable ones\u2014without having to meet the regulatory requirements to which banks are subject. This type of regulatory arbitrage is especially concerning insofar as it may affect consumers, for example, in terms of data protection. <\/p>\n
For all these reasons, we are concerned about the lack of adaptation of financial regulation to the new context of digital innovation. Authorities are accustomed to regulating based on the type of company and not on the activity it carries out. This approach does not align well with the current innovation scenario, which is why at AEB we continue to insist that we must be guided by the principle of “same activity and same risks, same regulation and supervision.” At AEB we support experimentation fields or regulatory sandboxes, in which fintech companies could develop their technological projects in the field of finance in a controlled environment. The idea has been included in a draft Law on Measures for the Digital Transformation of the Financial System, which we hope can be processed and approved quickly in the next legislative term. <\/p>\n
Another focus of concern is related to security. Banks have a clear awareness of these risks, as shown by the significant sums they invest in cybersecurity. In addition, banking institutions collaborate with each other and also with supervisors and security forces to undertake joint learning in this area. This collective effort must also include the digital literacy of users and universal internet connectivity, although much remains to be done in this chapter. AEB has begun to develop a digital education program for elderly people living in rural areas as a way to contribute to the economic, social, and cultural inclusion of the so-called “empty Spain.” <\/p>\n
In short, digitalization represents a colossal challenge for our banks, as it affects all the activities they carry out, but at the same time it offers the opportunity to respond to customer needs with much more efficient cost structures. And this, for a sector subject to intense profitability pressures, becomes a tool of vital importance. Aware of this, our banks are making the appropriate decisions to continue being among the most efficient in the world and thus be able to fulfill their essential function: financing companies and families in the most effective way possible. <\/p>\n