15/11/2019  Opening remarks 11th edition of the European SSM Roundtable/International Bankers Forum Margarita Delgado Deputy Governor  Good Morning and welcome to Banco de España for this 11th edition of the European SSM Roundtable, organised by the International Bankers Forum (IBF). The topic for today’s roundtable is the management of non-financial risk. This is an issue which is always in the spotlight and, at the same time, is quite hard to tackle. The concept of risk is continuously used in banking regulation. A quick search in the CRR1 or CRR2 text will reveal that it is mentioned nearly 1,500 times in each. Banks are certainly familiar with the regulatory requests to understand, measure, hedge, control, assess, address or mitigate risk. I believe it is fair to say that any firm that has survived the crisis and its long aftermath, without public support, has been largely successful in fulfilling these risk-related tasks. Of course, supervisors are also permanently concerned about risk; to some extent, it is what we are paid for. Still, I believe both banks and supervisors tend to feel rather comfortable when we assess financial risk. Don’t misinterpret me. We are perfectly aware of the consequences that a mismanagement of financial risk can entail, but we tend to look at financial risk in a more natural and intuitive way. Things get a lot stickier when we look at non-financial risk. What is the nature of non-financial risk? And what makes it different from more traditional financial risk?
Parliament has established the Payment System Regulator, a new economic regulator, to improve competition and innovation in the payment systems, through which payments using bank accounts are made hitherto dominated by the large banks,  To support greater competition and innovation, the Bank of England has widened access to RTGS, the high value settlement system, so that large non-bank payment service providers can access it directly rather than having to go through the banks with whom they are in competition. 10  At the same time, the introduction of electronic technology, Near Field Communication, has allowed the development of contactless payments and reduced the ‘hassle’ of making small value card payments and enabled smart phones to be used as payment devices. And of course, more commerce is migrating to the internet where physical cash simply cannot be used. Internet sales now account for over 15% of retail sales. We are, as a result, seeing important changes in the way we use money as a means of payment. New players, from the largest technology companies to challenger banks and internet startups are coming into the various elements of the transaction chain. And there seem to be changes in the way we use cash.