As a response to these entrants, financial services firms are looking to modern technologies such as machine learning and artificial intelligence to increase automation, deliver cost reductions, increase efficiency and gain a competitive advantage.
These technological solutions and the use of digital platforms have lowered entry barriers for alternative payment providers and pose new challenges for existing service providers such as banks or credit card circuits. These rapid changes are also affecting financial regulation and supervision because digitalisation, if left unregulated and insufficiently supervised, may lead to increased vulnerabilities and higher risk of IT failures, outages and cyber-attacks.