Developments in the technological infrastructure have increasingly been at the forefront of economic discussions in the second half of the 1990s. One of the most striking economic events of the last years has been the pace and depth of change in information and communications technologies (ICT), and the discussion about a so-called “new economy” in the euro area. There has been no undisputed definition of what should be understood by the term “new economy”, but generally it included the following characteristics. A “new economy” seemed to manifest itself mainly in a permanently higher rate of potential output growth, with gains in productivity driven by technological innovation being the main force behind the upsurge. 1  D. Coyle, “The Weightless World: Strategies for Managing the Digital Economy”, MIT Press, 1998, p.VII. BIS Review 23/2003  1  The problem with the “new economy”, however, was that the evidence available for the existence of it was fairly mixed, both for the United States and - even more so - for the euro area. On the one hand, some studies, undertaken at the aggregate level, tended to conclude that the data did not warrant an affirmation of a “new economy”. On the other hand, several microeconomic studies found evidence of significant effects of information technology on firm-level productivity. From the beginning, there was, however, only limited, if any, evidence of a “new economy” in the euro area.
It will also enhance public confidence in the efficiency and performance of the financial system to contribute to the overall development of the economy. This approach is also a move towards a differentiated regulatory and supervisory approach whereby companies that demonstrate strong corporate governance standards and risk management practices will be accorded 'lighter regulatory touch', which implies that they will be given greater regulatory flexibility. This underscores the importance of capacity building by the financial institutions in research and development and re-engineering of business processes in search of operational excellence and enhanced customer service delivery. A strong culture of excellence is therefore vital: one that is embedded in all levels of the organisation; one that fosters and rewards innovation and service quality. A customer-centric focus is, and will continue to be, the winning formula for a successful financial services provider. In particular, insurers must ensure suitability of products sold or advice given; play an active role in enhancing financial capability of consumers; and ensure policyholders are treated fairly. This regulatory approach will basically benefit those companies that are efficiently-run and wellcapitalised. In this regard, Axa Affin will benefit from this new regulatory approach if it puts in place a risk management system that could be used to capitalize incentives accorded by the new framework. The synergies derived from the strengths of the bank and the experience of foreign insurance partner should be harnessed to benefit from this new environment, particularly in the bancasurance line of business.