Opening Statement by Colm Kincaid, Deputy Governor of the Central Bank of Ireland at the Joint Oireachtas Committee on Finance, Public Expenditure, Public Service Reform and Digitalisation, and Taoiseach

Cathaoirleach and Committee members, thank you for the invitation to be here today to discuss digital banking.  I am joined by my colleagues Yvonne Madden, Head of Domestic Banks and Retail Credit, and Peter Gallagher, Head of Enforcement Market Abuse and Oversight.

Introduction

The digitalisation of financial services has brought many benefits to consumers. The EU system of regulation provides an important platform from which to continue to innovate in an environment that secures consumers’ best interests.

But digitalisation has also changed how, as consumers, we receive services (financial or otherwise) and our norms and expectations around digital services and our use of technology generally continues to evolve.

Regulation is playing its role to provide guardrails for this digital evolution by setting out standards for:

• New types of digital products such as crypto assets (MiCAR)¹;
• Making sure there is continuity and smooth recovery if systems go down (DORA)²; and
• Dealing with the implications of Artificial Intelligence and codifying the requirements and rights of consumers when making payments (PSD)³.

Importantly, many of these regulations are prescribed at EU level. This is good because it enables us to access regulated financial services not just from entities incorporated in Ireland but also from firms in other EU Member States.⁴

Let us also be clear that operating in an EU system of regulation does not mean there is no role for national policies for how this digital evolution occurs.

It should also be noted that the substantive requirements of banking regulation are the same for an EU bank whether it provides those services through bricks and mortar premises or digitally, and regardless of which EU Member State it is incorporated in. 

But the benefits of digitalisation will only be realised if the risks are appropriately addressed. Just as digitalisation has brought in convenience, additional functionality and lower cost for many consumers, it has also brought new opportunities for criminals to exploit. And, it has resulted in variations and gaps in the nature and quality of service consumers receive, in particular when things go wrong. These are topics on which the Central Bank has work underway, including working with other agencies in Ireland, the EU and internationally, and I welcome the opportunity to explain this work and share our perspective on the path ahead.

Digital frauds and scams

To take one of the key risks, that of digital frauds and scams, the Central Bank’s work can be described under three headings:  

• First, working with other law enforcement agencies to combat financial crime, to minimise the threat of frauds and scams to which consumers are exposed in the first place.
• Secondly, continuing to raise standards in the firms we regulate, so they protect and support their customers, including when they fall victim to frauds and scams.
• Thirdly, supporting public policy and legislation, so we keep pace with the policy implications of technology and the types of criminal behaviour to which consumers are exposed. Under this heading, the Central Bank supports the reforms underway at EU level to strengthen fraud prevention, broaden liability for financial service providers for certain frauds and place additional statutory responsibilities on electronic communications service providers.

Evolving our approach to supervising financial services provided digitally

We are also evolving our supervisory approach to target risks relating to digitalisation more generally, including operational resilience and cyber security.

And we see that digitalisation brings increased risks to financial services from technology platforms and means of communication that sit outside financial services. These risks must be tackled if we are to avoid actions outside financial services damaging people’s trust in financial services, while also making sure of course that financial service firms are responsible in how they use technology.

Since our previous appearance before this Committee on fraud, the Central Bank has engaged with large technology platforms incorporated in Ireland to get them to implement additional controls to combat unauthorised financial service providers (in some cases with considerable success).  In addition, we are the first authority in Ireland to secure the EU statutory status of "trusted flagger" for financial frauds and scams and we have led coordinated engagement with these technology platforms at a global level.⁵

We are also introducing new requirements in our Consumer Protection Code from March 2026 to ensure the firms we regulate use technology with a customer focus and not in a way that seeks to unfairly exploit or take advantage of consumers to their detriment. The Code will also enhance protections for consumers in vulnerable circumstances.

Conclusion

Digitalisation and access to an EU regulated market bring great benefits for us as consumers.

Digitalisation also brings new risks and the threat posed by criminals is significant and system-wide work is required. The Central Bank is active in that work at national, EU and international level and we will play our part.

It is also accurate to say that there remains a lot that firms can do at a practical level to improve the quality of service they provide, whatever their business model. This too will continue to be an area of focus in our supervisory work, including as we implement new regulatory requirements in 2026.  

Thank you for your attention. I and my colleagues are happy to take your questions.