Responding to a European Commission consultation on digital financial services, the ECB states: "One important challenge in relation to digital finance will be to reassess the dependence of European financial service providers on non-EU providers of critical services and technical infrastructures (e.g. the “cloud”), while EU-based global players have struggled to emerge. This could lead to banks’ reliance on a few non-EU service providers and possible concentration issues at both entity and systemic levels."

The ECB has actively supported the development of an EU bank-backed push to take on US card schemes Mastercard and Visa, but it holds little sway in the arena of cloud-based services as more banks move critical applications to the likes of Amazon Web Services, Microsoft Azure and Google Cloud.

Similarly, the arrival of Big Tech companies in financial services is prompting a rethink of supervisory oversight based around the mantra “same activity, same risks, same supervision and regulation”.

The ECB believes that Big Techs have the potential to quickly gain a significant market share, which it says could lead to significant concentration risks and, in the event of operational failures and targeted cyberattacks, could have a systemic impact on the financial system as a whole, thus increasing financial stability risks

States the central bank: "The prospect of technology companies increasing their footprint in the financial services sector and using increasingly sophisticated ways to provide these services could warrant the need to extend the regulatory perimeter and to explore the possibility of complementing the current entity-based regime with an activity-based approach ."

Other areas requiring enhanced attention include the growing use of artificial intelligence and distributed ledger technologies, and environmental sustainability issues relating to increased power consumption in a digital marketplace.

"In the ECB’s view, the scarcity of AI experts on the market has led to a reliance on third parties and related co-sourcing and outsourcing risks, as has happened with cybersecurity experts," the institution states. "In addition, specialised training in relation to AI techniques and data labelling requires a generally significant effort, as well as the availability of scarce specialised supervisory resources

On sustainability, the ECB says it would endorse the development of a monitoring and reporting framework at global level concerning financial entities’ environmental footprint, including their supply chain