There may be costs arising from investments in innovation that fail to bear fruit or from investments with payback cycles that end up being much longer than expected, as apparently may be the case, in principle, of some of the initiatives being developed in relation to Distributed Ledger Technology. And risks relating, inter alia, to personal information privacy, fraud or cyber-attacks. In addition, the proliferation of new technologies may also lead to the financial exclusion of those users at a distance from them, who could be adversely affected if the continuity of service provision through traditional systems is not guaranteed. In short, we are facing great technological change in the banking industry, the effects of which are still not clear. The development of new services is a great opportunity for renewal for the more dynamic banks, as it may provide them with efficiency improvements and mean that they can offer greater services to their customers. And, improving customer service is precisely one of the main challenges facing the banking industry, which brings me to the final point of my address: the importance of maintaining the confidence of bank customers. 5/7  3 Confidence Confidence is the most important and the most fragile of a bank’s assets and determines the nature of its relationship with its customers, beyond the ambit of mere commercial transactions. Bank customers deposit their savings with credit institutions, trusting that they will return those savings to them, when they need them, on the terms agreed.
Against this background of low profitability, banks have already made significant efforts to reduce their operating expenses, by adjusting their productive capacity. The number of banking groups has been reduced by 44% since 2007. And, from their peak levels in 2008, 3/7  the number of offices and employees in the banking industry have been reduced by 37% and by 31%, respectively. Orderly correction of the excess capacity in the Spanish banking industry has raised its level of efficiency relative to the banking systems of other European countries. However there is still room for further improvement. 2 New technologies - FinTech The second challenge facing traditional banking activity arises from the development of new technologies and entry into the banking market of so-called FinTech companies. Banks are sometimes presented as rigid, inefficient institutions, in contrast to new agile unregulated businesses, which seek to offer a better service to customers through a broad range of innovations. An extreme view is that these businesses could actually displace credit institutions from the provision of traditional financial services. In my opinion this is a simplistic, distorted view of a much more complex reality. Certainly we are facing a major technological transformation of banking activity. Permanent connectivity and the sheer number of mobile devices affect the way in which financial services are provided and used. Users increasingly demand the ability to access their current accounts and to initiate transactions at all times and in all places.