Traditional banks are taking the new technologies on board, occasionally through strategic alliances with new technology firms. New companies are also being incorporated into the sector, ranging from small start-ups to large firms. The new firms must, however, win the confidence of consumers and investors,  6/7  something that traditional financial institutions have secured over a long period of time, anchored by strong regulation and financial supervision. From the standpoint of the regulators, the fintech challenge affects both prudential and consumer protection policies. From the prudential perspective, regulators must strike a balance between catalysing innovation and the efficiency that new technologies can provide, and maintaining a sound regulatory framework. The guiding principle should be to apply the same regulation for the same type of financial services. In this respect, as the presence of fintech increases, it might be useful to put greater emphasis on the regulation of services, instead of placing it on the institutions that provide these services. Turning to consumer protection policies, it is vital that investors and consumers should understand how the new services function and the attendant risks, including, for example, credit, cyber-security and privacy-protection risks. Here we should strengthen our information and financial education policies. We are mindful at the Banco de España of the need to step up our efforts in this area.
Indeed, last week we approved a reform whereby, under our Directorate General Operations, Markets and Payment Systems, a new Associate Directorate General Financial Innovation and Market Infrastructures was created to assume the competencies in these areas, centralising in this new structure the functions previously assigned to different units in the Bank. This Associate Directorate General will have to face two families of problems. First, the questions that arise with the emergence of new agents and new operators in the financial markets, providing services that already existed (but in a different way), or services that did not exist, namely new types of financial services. As regards these new market players, two groups of problems are posed: on one hand, those referring to matters of competencies, i.e. all agents and operators should be subject to the same demands or regulations; on the other, investors and consumers should be protected and alerted as to the new risks, just as they are in respect of the former operators and their products. The second family of matters which the new Associate Directorate General of the Banco de España must face concerns new technology and its application in financial markets, something which, in these times of continuous innovation, is obviously of great importance. Thank you for your attention. 7/7