Topic: Technology and innovation

The financial services sector is becoming increasingly reliant on cloud service providers (CSPs) to fulfil its growing data processing and storage needs. Financial services providers in the United States have reportedly had the highest levels of adoption, operating 54 percent of their workloads in the cloud; and according to the European Central Bank, banks spent 13.5 percent more on cloud outsourcing in 2024 than in 2023.

The European Banking Authority (EBA) is currently consulting on its draft guidelines on the sound management of third party risk (Draft Guidelines), which are intended to replace the 2019 guidelines on outsourcing arrangements (2019 Guidelines).

Financial regulators globally emphasise the importance of financial entities being operationally resilient, which includes the ability to manage and recover from disruptions caused by their service providers. The topic receives significant attention in the financial services sector because the sector is regulated, with the aim of promoting financial system stability.

Increased regulatory burdens on asset management businesses have resulted in additional cost pressures. However, regulation has also required more pricing transparency, which has led to an increasingly competitive market, with investors demanding either ultra-low cost or increasingly bespoke investment solutions.

As public awareness of Web 3.0, the metaverse and other associated technologies increases, there is further pressure on governments, businesses and regulatory bodies to keep abreast of both the possibilities and the risks of these new worlds. In light of this, the European Commission (the Commission) is looking even further ahead than Web 3.0 and recently published a communication entitled “An EU initiative on Web 4.0 and virtual worlds: a head start in the next technological transition”.

As digital banks gain global momentum, traditional banks face challenges from these new players that offer simple, user-friendly products, data-driven interactions, and quick loan approvals, often eliminating fees and commissions. With its tech-savvy population, Turkey is no exception to the worldwide shift in customer preferences toward digital platforms.

In this blogpost we summarise a recent interview with Jens Hachmeister, Managing Director, Issuer Services and New Digital Markets, Deutsche Börse Group, in relation to the D7 platform.