Publicis Sapient: Impact of Digital Euro on Transactions

In the fast-evolving landscape of financial technology, the introduction of the digital Euro signifies not just a technological advancement, but a fundamental shift in the way financial transactions are conducted and perceived.

In this deep dive, we speak to Publicis Sapient’s Financial Services Lead, Professor Doctor Alexander Schroff, on the impact of this shift. 

For Schroff, the digital Euro “necessitates a comprehensive reevaluation of traditional banking practices and structures, heralding a new era where traditional financial institutions must adapt, or risk becoming obsolete”.

The digital Euro: Delivering a borderless financial future

“Imagine a financial ecosystem where transactions are seamless, instantaneous, and secure – the digital Euro promises just that,” adds Schroff. 

Indeed, the digital Euro could represent freedom of movement and accessible payments for all securely and privately. 

“As central banks embrace digital currencies, the conventional role of banks in mediating transactions faces a radical upheaval,” continues Schroff. 

“The advent of the digital Euro signals a departure from the reliance on intermediaries in the financial process, challenging banks to reimagine their place in the digital economy.”

Digital currencies as part of a banking evolution

The role of the digital Euro is also expected to have a seismic impact on banks too, as Schroff notes. 

“For years, the banking sector has served as the bedrock of financial transactions, providing stability and trust. However, with the rise of digital currencies like the Euro, the traditional role of banks as intermediaries in financial transactions is undergoing a seismic transformation. 

“Banks are going to have to advance not just their digital financial offerings, but customer experience (CX), support and security as well. 

“This shift not only challenges established banking norms but also presents unprecedented opportunities for innovation and disruption within the industry.”

Indeed, part of the shift to adopting the digital Euro is about accepting and embracing decentralisation, and redefining what financial trust looks like. 

Schroff says: “The advent of the digital Euro signals a departure from the reliance on intermediaries in the financial process, challenging banks to reimagine their place in the digital economy. Hence, the digital Euro opens the floodgates to innovation in payment systems. 

“Banks will be compelled to invest in cutting-edge technologies to stay relevant, fostering a competitive environment that will ultimately benefit consumers. 

“The emergence of decentralised finance (DeFi) platforms and smart contracts will push banks to redefine their service offerings, steering them towards a more customer-centric approach.”

CBDCs: The role of central banks 

Indeed, digital currencies look set to touch central banks too in the form of CBDCs. 

“As central banks embrace digital currencies (Central Bank Digital Currencies, CBDC), the conventional role of banks in mediating transactions faces a radical upheaval. 

“Over the years, the banking sector has established itself as the cornerstone of financial stability and trust. 

“However, the advent of the digital Euro poses a formidable challenge to this status quo, forcing banks to adapt to a rapidly evolving digital landscape or risk being rendered obsolete in an increasingly interconnected world. 

“The banks that can integrate digitisation across the whole banking experience will be able to provide seamless banking experiences which cooperate with the incorporation of the digital Euro, building reliability and trust with customers.”

With the digital Euro set to hit the market amid the digital revolution in today’s financial world, Schroff believes it will be just a catalyst for further evolution. 

He concludes: “Banks must now navigate uncharted waters, embracing technological advancements and reimagining their roles in this digital era, or risk being left behind in the wake of the transformative wave reshaping the financial landscape.”

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