Challenges and opportunities for a financial services ecosystem in transition - Makhlouf

Governor of the Central Bank of Ireland Gabriel Makhlouf spoke this afternoon about current trends in the Irish, German and Eurozone economies, as well as opportunities and challenges in the financial system at an event hosted by the Consulate General of Ireland and IHK Frankfurt, in partnership with Verband der Auslandsbanken in Frankfurt, Europa Union Frankfurt, Irish Business Network Frankfurt and German-Irish Lawyers and Business Association.

Speaking at the event, Governor Makhlouf said: “The financial services ecosystem is under fundamental transition.

The digitalisation of banking and payment services through technology-led change is transforming both the sector and the consumer experience.  A range of new entrants are entering the market and new and incumbent business model are shifting to mobile and online delivery. Getting this transition right will be key to ensuring the sector serves the needs of consumers and the economy into the future.

“While the transition of the ecosystem is challenging and disruptive, the new digital era presents real opportunities –for the economy and consumers, but also for the traditional banks to become more efficient in their operational processes.

“But this change also presents challenges for us in the regulatory community.

“As we transition through a period of fundamental change in financial services, lawmakers and regulators need to be focused on the future, engaged with the industry and open to new and different ways of managing society’s changing expectations of its financial service providers. We need to take the lessons from the past, but also seek to anticipate and support financial services innovation in line with society’s risk appetite.

“In Ireland, the Central Bank’s regulation and supervision of firms is risk-based and outcomes-focused. Our regulatory priorities are informed by this ever-changing environment, and by our focus on promoting a resilient financial system which serves the needs of consumers and the economy.

“We do not operate a ‘no failures regime’, rather we seek to ensure firms enter and exit the market in an orderly way and, do so in accordance with the objectives of the financial services frameworks, in line with EU norms and standards.”