Press release 4 October 2016 – 15/2016

Opportunities and threats of digitalisation in the financial services sector: Has the Finnish financial sector awoken to the challenges of FinTech?

​The Financial Supervisory Authority (FIN-FSA) conducted in summer 2016 a digitalisation survey of its supervised entities. The results of the survey showed that the views of Finnish respondents differ from those in international surveys. 'Do current entities often try unnecessarily to cope by themselves?’ was a question put forward by Anneli Tuominen, Director General, in her opening speech at the FinTech seminar.

'The competitiveness of the Finnish financial sector is important for the FIN-FSA. Finnish customers must in future continue to be provided with high-quality services that fulfil their needs. Finland has a reputation as a good country for start-ups. This reputation should be widely utilised in the FinTech sector, too,’ notes Director General Tuominen.

The FIN-FSA today opens an Innovation HelpDesk for FinTech entities, and other innovators in the sector – both old and new. The objective is to increase dialogue between the FIN-FSA and FinTech entities and to create a positive atmosphere that supports development in the sector.

We must build confidence

The financial sector cannot operate without confidence. Confidence can, however, be quickly lost. ‘Confidence in the FinTech sector could be hurt most by abuses or bankruptcies that take place at an early stage of the sector’s development and lead to major losses in customer assets,’ avers Tuominen.

A supervisory authority cannot identify in advance all the risks related to new services and operating practices. As the FinTech sector develops, we must ensure that new functions do not transfer financial system risks out of sight or build the sector’s risks of contagion.

Crime is also increasingly moving online. Large entities, start-ups as well as service users will have to take measures in the field of information security.

A level playing field for all entities

Regulation must under all circumstances ensure a level playing field and adequate customer protection for all entities. ‘The threshold for market entry must not be set too high,’ notes Tuominen.

The primary aim of the entities is to operate internationally, and therefore regulation should be based on European solutions, rather than national regulation.

Digitalisation survey: an increase in IT resources, higher digital skills, enhanced services

Of the respondents, 65% consider that financial sector digitalisation will improve their operating conditions, while 25% consider that their operating conditions will remain unchanged. Of banking sector respondents, 70% were of the opinion that current financial sector entities have the best opportunities for exploiting digitalisation in the sector. Only 10% of banking sector respondents considered that FinTech entities hold the best opportunities for reaping the benefits of digitalisation. At the same time, however, global surveys show that there are fears that, in the banking sector alone, FinTech will take more than one quarter of current business volumes.

The results of some international surveys show that current entities are seeking to network themselves with FinTech companies significantly more actively than Finnish entities. According to the results of the FIN-FSA survey, investment firms and management companies, in particular, are trying to cope by themselves, even though the increasing automation of investment advice and big data will probably have a significant impact on these sectors too.

A large part of the supervised entities have prepared for digitalisation by increasing their IT resources, actively building up the digitalisation skills of their organisation and developing new services and service channels.

Digitalisation survey: challenges are organisation structure, lack of skills, regulation, outdated IT systems

According to the respondents, the biggest challenges for the promotion of digitalisation are organisation structure, a lack of skills, and regulation. For banks and insurance companies, the biggest challenges are outdated IT systems. In this respect, the results are broadly in line with those of international surveys.

For further information, please contact

  • Anneli Tuominen, Director General
  • Mervi Toivanen, Chief Analyst (digitalisation survey)

Requests for interviews

FIN-FSA Communications, tel. +358 50 385 5154