The financial sector will need to carry out “large investments” to be able to adjust its business model to technological advances, as Margarita Delgado defended this Friday. The deputy governor of the Bank of Spain has stressed the importance of banking entities knowing how to adapt to the challenges of the digital future, in a sector that stands out for its ability to change with the needs of the moment.
Delgado took advantage of his speech during the inauguration of the XXII annual Conference of the Risk Management Club – which Europa Press reports – to point out the complexity of the current circumstances, where geopolitical tensions and more uncertain macroeconomic environments add to traditional risks. , which requires banks to make an additional effort to establish a strategy that allows them to navigate this environment.
The economist has warned that entities must remain “very vigilant” regarding the evolution of technology, trends and society’s response to them, informing themselves of the changes to adapt their strategy and business model, for which that it will be necessary to allocate significant investments.
Drive financial innovation
On the other hand, entities will also have to “accompany” the productive sector on the path of transition towards more sustainable models, which will require efforts to establish a strategy for the bank itself and for the different economic sectors that it financial. . In parallel, the authorities, both regulators and supervisors, have recognized the deputy governors, they face “the same scenario, but from a different position.”
Regardless of whether new regulations and areas to supervise arise, “the authorities have the challenge of making prudential requirements compatible with a more flexible approach that allows the development of financial innovation in entities and their progressive adaptation to new environmental needs. and social, with information still quite incomplete.”
However, despite all the difficulties and doubts that the future holds, Delgado has expressed confidence that banks will know how to adapt to the scenario that is to come, as he has stressed that the success of a business model is based on the ability . of anticipation and adaptation to changes in the environment in which it operates. For the moment, he acknowledged, the banking industry is putting the customer and their expectations at the center of its strategy, which are also evolving hand in hand with technology, so banks will have to evolve in the same direction and speed. “if they do not want to lose their current position of dominance.”
The deputy governor has also considered that technology causes “disruptions”, for example in the new products that banks can offer, which could have a less standardized design and more tailored to the needs of clients.
But the emergence of new technologies also affects the communication channels between entities and clients, as well as the potential emergence of new competitors, whether neobanks, fintechs or bigtechs, which offer services and products in competition or collaboration with banks. traditional . All of this, he has predicted, will cause the financial sector to review its business models and look for the most efficient way to coexist satisfactorily in this new ecosystem.
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