As Andrea Enria, the Chair of the ECB Supervisory Board, recently stated when addressing how digitalization might change banking, “supervisors are technology-neutral, but not risk-neutral”.1 As banks become more digital, the IT risks, including cybercrime risks, become increasingly relevant. In addition, as the financial system adapts to the new technological trends, concerns arise regarding issues such as data privacy, potential threats to the financial integrity, clarity, and consistency of the regulatory landscape and the potential for regulatory arbitrage, adequacy of the existing financial safety nets, including the central banks’ role as a lender-of-lastresort. Furthermore, the risk of procyclicality in light of the new lending platforms with little human interaction is also accentuated. Asymmetric information and lower transparency may result in underestimation of risks by new players, which in turn may put pressure on the profitability of 1/3  BIS central bankers' speeches  traditional players (banks) and increase their risk appetite, as well. And one of the lessons from the recent crisis is that increased access to finance yields short-term benefits, but it can also lead to financial instability overtime, especially if the level of financial literacy is lagging behind. When balancing between opportunities and risks, policymakers are faced with a rising challenge to be nimble, innovative, and cooperative in enabling financial innovation, without neglecting their main responsibility for preserving financial stability and dealing with systemic policy issues.
The survey performed by the Financial Stability Institute on the use of innovative technology2 reveals that within data collection, supervisory agencies across the world use applications for supervisory reporting, data management and virtual assistance, while within data analytics, applications are used for market surveillance, misconduct analysis, as well as micro-prudential and macro-prudential supervision. To facilitate the contact with the industry, the National Bank has recently developed an Innovation Gateway, as a platform where firms can raise questions and get answers concerning the regulatory framework. The main purpose of the Gateway is to facilitate, encourage, and support innovation in financial services, by providing information to all firms willing to pursue innovative business activities. It provides a clearly visible interface to our website and offers an insight view on issues related to application of new innovative technologies. We are pleased that through this channel, launched a couple of weeks ago, we have already received several queries from fintech firms coming from EU member states as well as local fintech company that intends to offer new services in the payments area. Our internal expert group will interact with these entities to properly understand their business model, the benefits they bring, potential risks and asses how they fit in the current regulatory framework. One of the main priorities of the Hub in the following period will be to develop a Financial Services Digitization Strategy. The main goal of the Strategy will be to provide an enabling environment, including open and affordable access to core digital services and infrastructures.