Olli Rehn
Member of the Board of Bank of Finland
Chair of the Finnish Financial Supervisory Authority (FIN-FSA)
FIN-FSA’s annual seminar on financial services
Helsinki, 22 November 2017
Ähnlich wie Olli Rehn: Digital transformation in the financial industry: what's good for the society? FIN-FSA's annual conference, 22 November 2017. (20)
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Olli Rehn: Digital transformation in the financial industry: what's good for the society? FIN-FSA's annual conference, 22 November 2017.
1. Bank of Finland
Digital transformation in the financial
industry: what’s good for the society?
FIN-FSA Annual Conference - Financial Services 2022
Helsinki, 22 November 2017
122.11.2017
Olli Rehn
2. Suomen Pankki – Finlands Bank – Bank of Finland
Digitalisation creates new business models and
increases competition
Digitalisation
• Computing power
• Broadband
connectivity
• Mobile devices
• AI
Regulation
• Digital Single Market
• Capital Markets Union
• FinTech action plan
• PSD2
• MIFID II
Consumer
behaviour
• Awareness
• Actively online
• Social media
22.11.2017 Olli Rehn 2
3. Suomen Pankki – Finlands Bank – Bank of Finland
The playing field of payments is changing:
Is it an old game with new rules – or an entirely new game?
Olli Rehn 322.11.2017
Kuva: Wikipedia/Official Olympic Report Kuva: Kari Kemppainen
4. Suomen Pankki – Finlands Bank – Bank of Finland
Importance of payments for Finnish banking sector
22.11.2017 Olli Rehn 4
EUR 0.5 billion
Net income from
payments
8 %
of total income
19 %
of operating profit
10 %
-- increase in net
interest income that
would be required to
compensate the losses
- 4 %
in total income
What if
half of net income from
payments were to
vanish?
5. Suomen Pankki – Finlands Bank – Bank of Finland
Importance of the FinTech ecosystem
FinTechs can offer consumers enhanced user experience through innovative
services
Need for FinTech hubs, accelerators and mentoring
Effort must be put into international cooperation
22.11.2017 Olli Rehn 5
6. Suomen Pankki – Finlands Bank – Bank of Finland
Size of domestic banking sector will grow to ca.
400% / GDP – well above the average in the EU
22.11.2017 Olli Rehn 6
0
100
200
300
400
500
2015Q4 2016Q4 2017Q2 2018e
Others Nordea
Source: FIN-FSA.
% of GDP
The size of the Finnish Banking sector
7. Suomen Pankki – Finlands Bank – Bank of Finland
Importance of digital skills and financial literacy
Digital skills are at high level in Finland.
The minority unable to use digital financial services must not be neglected.
All citizens need at least basic knowledge on cyber security and data
protection.
Adequate financial literacy skills are a necessity in the digital age.
Cooperation among the promoters of financial literacy is extremely important.
One example of potential measures to curb over-indebtness is the positive
credit register.
22.11.2017 Olli Rehn 7
8. Suomen Pankki – Finlands Bank – Bank of Finland
ICOs and cryptocurrencies price bubble
22.11.2017 Olli Rehn 8
9. Suomen Pankki – Finlands Bank – Bank of Finland
Blockchain vs. centralised payment systems
Blockchain is of interest for financial sector actors from the perspective of new
applications
Promising applications in the financial sector:
– Interbank international credit transfer
– Securities clearing
Central banks are creating centralized infrastructure for real-time payments
– TARGET Instant Payment System (TIPS)
– TARGET2-Securites (T2S)
22.11.2017 Olli Rehn 9
10. Suomen Pankki – Finlands Bank – Bank of Finland
Summary
Finland has potential to become a success story in the financial
industry’s digital transformation – for the benefit of the whole society
This calls for strong innovation and a flourishing FinTech ecosystem
And for a balance between innovation and technology, on one hand,
and customer protection and financial stability, on the other
It underlines the growing need for digital skills and financial literacy
22.11.2017 Olli Rehn 10
Hinweis der Redaktion
Size of Finland’s banking sector
Others Nordea
% GDP
Source: FIN-FSA