Speaking at the 2015 Bavarian Financial Summit, Andreas Dombret, a member of the Bundesbank’s Executive Board, highlighted the opportunities and risks presented by the digitalisation of the financial sector.

He stated that the majority of bank customers in Germany regularly do their banking online. Using today’s IT can make the financial system much cheaper, much faster, more customised, more flexible and more efficient.

Dombret believes that the potential side-effects of innovation, however, are far-reaching: "Whenever humans innovate, errors and unwelcome developments are possible. Banks are having to fend off thousands of attacks on their IT systems every day."

If they bury their collective heads in the sand and fail to come up with a compelling package of competitive services, banks will quickly fall behind irrecoverably in the fast-moving digital world. According to Dombret, change is irreversible and will require banks to come up with a suitable digital strategy in order to remain profitable.

This will also affect regulators and supervisors, he added. As it is not always possible to fit new risks into the existing categories of rules and supervisory practices, it is all the more important, in Dombret’s eyes, for banking supervisors to look at technological trends and developments early on in order to identify unwelcome developments.