Alessandra Perrazzelli: Challenges for the evolving financial system - the balance between resilience and adaptability

Speech by Ms Alessandra Perrazzelli, Deputy Governor of the Bank of Italy, at the International Finance & Banking Society IFABS 2022 Naples Conference, University of Naples "Federico II", Naples, 7 September 2022.

The views expressed in this speech are those of the speaker and not the view of the BIS.

1. The financial system and innovation technologies – recent developments:

FinTech is – with climate change – one of the structural trends most affecting and shaping the global financial system. Digitalization is leading to profound changes in demand and supply for financial products and services. Innovation technologies are reshaping business models, developing new payment and financial services, restructuring the value-chains, and influencing consumers' habits and producers' organizational structures. Moreover, COVID-19 has been a catalyst for this change, pushing financial institutions to increase their investments in innovation technologies.

Intermediaries are increasingly using new technologies, such as artificial intelligence, cloud storage and computing, and robotics to reduce costs and offer new services. The spread of internet connections and mobile devices, the increased availability of information about users and the lower cost of automatic data processing are opening up the financial sector to innovative business models. Newcomers – such as FinTech companies, third-party providers, start-ups and Big Techs – have arrived in the financial sector, changing relationships with clients and offering tailored-made products.