Núñez outlines banking sector's digital, geopolitical, and climate challenges

The banking sector is undergoing profound digital transformation, with artificial intelligence (AI) emerging as a key driver.

While AI offers significant opportunities for efficiency and enhanced customer experience, it also poses considerable challenges.

Deputy Governor Núñez highlighted concerns regarding the explainability and interpretability of AI-generated output, stressing the need for robust governance, data validation, and quality standards.

The reliance on external providers for digital solutions also introduces new vulnerabilities.

Beyond AI, the financial landscape is becoming more digital, decentralised, and programmable, with new actors and products.

Ensuring these technologies are embedded in solid institutional frameworks is crucial for investor protection, ethical finance, and overall financial stability, demanding operational resilience and robust data governance.

The banking sector faces two further structural challenges: geopolitical risk and sustainability.

Geopolitical instability demands that banks strengthen their ability to monitor and manage risks, integrating them into models to anticipate disruptive scenarios.

While past shocks were absorbed, future government response capacity may be fiscally limited.

Sustainability is a prerequisite for long-term financial stability, requiring economies to adapt to climate change.

The financial sector plays a leading role, but faces difficulties like a lack of high-quality data for transition plans.

Despite this, the transition offers opportunities for new business and greater resilience, with the financial sector acting as a key driver of change.