As digitalisation progresses, the quantity and value of such client data are increasing. Established providers of payment services are having to confront the fact that competition at the client interface and competition for client data is intensifying. In the digital age, the wide network of branches which traditionally gave banks’ a competitive edge no longer provides that advantage. Developments in China show how quickly banks can lose their client interface to non-banks in the payments arena: Within a few short years, the online marketplace Alibaba and the news app WeChat have managed to capture more than 90% of the rapidly expanding mobile payments segment. 9 The growing focus on the client interface and client data also represents a challenge for central banks. Gross misuse of data and a lack of reliability could seriously erode trust in payment systems – and ultimately in money itself. Even with the new technologies and 8 9  I covered this topic at our Money Market Event a year ago. I stand by the point I made then – namely, that cryptocurrencies are more like speculative investment instruments than stable payment methods. Financial Stability Board (2019), Fintech and market structure in financial services: Market developments and potential financial stability implications, FSB White Paper, 14 February. Page 6/9  possibilities coming on stream, payment transactions must continue to function and be secure. For payment systems to remain future-proof, in-depth discussions between the main stakeholders in the Swiss financial centre are therefore essential.
This change creates a level playing field within the SIC system for existing and new providers – ensuring that the Swiss franc payment system remains efficient, secure and futureproof. The third challenge concerns the possible application of DLT to payment transactions. Switzerland, in particular, has witnessed the establishment of a fintech ecosystem in recent years, and we are a leading fintech hub. For central banks, DLT raises at least two fundamental questions. First, could it end up replacing current core infrastructure, such as RTGS? Various central banks have been experimenting with this idea, in close collaboration with private stakeholders. The results have yet to demonstrate that DLT is superior to a modern RTGS. Yet, in other areas of core infrastructure, such as securities settlement, it is entirely plausible that DLT-based systems could take hold. The second question is: How should existing systems based on conventional technology and new DLT-based systems interoperate? Should central banks or private sector players establish this link? Specifically, in this context: should central banks offer a digital token for certain DLT applications – such as securities settlement? Here, too, while a number of experiments are underway, there are currently no examples of such tokens having become established. Furthermore, private sector providers can themselves put their money in DLT systems by ‘tokenising’ it (e.g. in the form of ‘stable coins’). 10 As you can see, ladies and gentlemen, there are a lot of questions still to be answered, and they will require careful analysis.