Nickolas Reinhardt / Feb 2026
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The European Union has committed to creating a more integrated financial services single market that could stand next to that of London or New York. The aim is to bring more of the financial services capabilities into the EU and encourage European savings to be deployed within Europe and to meet Europe’s strategic needs, such as investments in infrastructure, new industries and defence.
The jury is very much out whether or not the EU will meet this objective. It will require the European financial services industry to become more competitive globally and attract even more European and international investors.
The European Commission is doing what it does best. It tries to bring a single market for financial services into existence through regulation and more integrated supervision. While laudable this will never be enough in itself.
One of the building blocks that will be required is that of technology. In its drive for higher efficiency and reduced costs, the financial services industry has always been an early adopter of new technologies. At their heart, modern financial institutions are large data processing entities overseen by sophisticated risk management frameworks. This applies to securities markets, as it does to banking, insurance or payments.
For more than a decade we, at Afore Consulting, have been exploring the transformative power of new technologies for the financial services industry. This has led to our Annual FinTech and Regulation Conference in Brussels that is now in its 10th year and has attracted the top names in the regulatory and supervisory community, including this year the Chair of the US Securities and Exchange Commission Paul Atkins, the Commissioner for Financial Services Ms Albuquerque, the Chairs of the European Supervisory Authorities, ESC and AML Authority, as well as many central bankers, markets regulators and industry CEOs. Our agendas have carefully dovetailed with the thought leadership coming out of the FinTech team in the European Commission.
The question of the link between technology and financial services remains as relevant now as it had 10 years ago. In fact, the acceleration of the evolution and adoption of new technologies, such as AI, modern payments, distributed ledger technology, crypto assets and stablecoins, and / or digital distribution channels, has made our discussions ever more relevant.
In the US we are seeing a real political commitment to migrate large parts of financial markets to distributed ledger technology; converting most claims, such as shares in listed companies, debt instruments, deposits and futures contracts, into tokenised representations. Taken to its extreme these new technologies, especially if coupled with autonomous AI solutions, could disintermediate large parts of today’s financial market infrastructures, especially when it comes to investment decisions, fund management, trading and the clearing and settlement of transactions.
For now, this still sounds a bit utopian. It is true that the regulatory and supervisory framework in the EU has not yet caught up with this possibility. It is also not clear how these new technologies would hold up in a financial crisis. Increased speed, full market transparency and automated execution can certainly exasperate any future market instability.
While we are still at the beginning of these discussions, there is little doubt that financial services are on the verge of a new technological transformation, maybe last seen with the famous ‘Big Bang’ in the late 1980s when finance met the new potential of computing technology. There are some that even believe the market will be entirely reinvented and that we are moving towards a model of decentralised finance, similar to what the internet did to modern information flows.
If effectively leveraged, these new technologies could help the EU integrate its fragmented national financial markets. As we all know, technology does not know borders. The EU could potentially get onto par with the existing global financial centres. It will face stiff competition not only from the USA and UK but also other jurisdictions such as Singapore, Hong Kong and the Middle East.
It would require the EU to be bold and for EU legislators to endorse these technologies as the new operating system for financial services, akin to the roll out of a new operating system in the world of computing; forming the basis for how we do finance in the 21st Century.
The EU has shown foresight in this regard. It has been among the first to adopt frameworks on crypto assets, cyber security and rules around many of the new technologies.
More will be required. The EU will need to face the awkward reality that most of the established EU financial services regulation would require a health check. Regulators and supervisors, but also the financial services industry itself, would need to move away from detailed prescriptive rules to a more principles- and outcomes-based approach to regulation, coupled with more consistent supervision and dialogue between business executives and their supervisors. Importantly, it would require the appetite of all involve to better understand and embrace the challenges, risks and opportunities the new technologies will bring.
