It has just been reminded to European banks that banking regulations do not save them from competing with tech-companies, paving the way for new entrants in the financial sector.
M. François De Villeroy, Governor of the Bank of France and President of the Authority for Prudential Control and Resolution (ACPR) said something significant concerning the relationship between banks and innovation, as reported by the business newspaper “Les Echos”.
In particular, according to the article, M. De Villeroy reminded banks that:
- The digital world is a new challenge for banking institutions
- Cyber-security will be one of the priority of the French presidency of the G7 in 2019
The governor also addressed concerns of banks challenged by new technologies:
- Big-Techs will have to apply banking and insurance regulations if they want to carry on such regulated activities.
- But nobody should expect that regulation means protection of existing situations.
- The only correct behavior (when facing competition), is innovation.
In a nutshell, if banks face competition from new businesses and technologies, then it is the banks’ responsibility to innovate to protect their position, or they could loose it.