Tag Archives: Digital Transformation

Joachim Wuermeling: Combining stability and innovation Bundesbank and fintech players in the digital financial ecosystem

Financial technology. Keynote speech by Prof Joachim Wuermeling, Member of the Executive Board of the Deutsche Bundesbank, at the Plug and Play Fintech Europe Expo 2021, 28 January 2021.

1 Introduction

Ladies and gentlemen, dear colleagues,

Good afternoon, and a very warm welcome from the Deutsche Bundesbank. I am delighted to be taking part in the Plug and Play “Fintech Europe Expo” today. As a central banker, this event offers me a unique opportunity to liaise with you and is certainly my first highlight of 2021. I look forward to a pleasant afternoon and an inspiring conference!

An innovative spirit has made financial technology the driving force transforming the world of finance. This technology has now become an essential part of banking, and therefore also central banking.

Looking at our virtual audience today, I see start-ups, venture capitalists, and consultants. To be honest, when you think of central banks, “innovation” might not exactly be the first word that springs to mind. Instead, your first thought might – hopefully – be “stability”.

But take it from me: stability and innovation are not mutually exclusive. In fact, they go hand in hand. Technological progress has always shaped the tasks and activities of central banks.

Although fintechs and central banks cooperate already, I believe they should do so on a much closer basis in the future. And that is why I am so happy to have the chance to speak to you here today.

I would therefore encourage you to keep an eye out for the digital activities of central banks! Here are three reasons why you should:

2 Central banks are relevant actors for digital innovation in finance

All fintech innovation is connected to central banks’ activities in some way or another.

For centuries, central banks have been the backbone of the financial system, issuing currency, providing payment infrastructures, and ensuring that banks are stable.

Digital transformation is relevant to us in two regards. The first is that we need to understand the technical progress in the industry when using our tools, whether it be in the area of monetary policy or in banking supervision. The second is that we make use of new technologies ourselves, be it in analytics, processes or products.

The actions we take might be highly relevant to you, your products, your business cases, or your ideas: Would it matter to you if we issued a digital currency, based gross settlement on a ledger, or if, as banking supervisors, we were to restrict the use of machine learning?

The impact central banks have on innovation is particularly relevant to the euro area, a major currency area which currently covers 19 countries and 350 million people. The Bundesbank, as the biggest central bank in the block, focuses on its role as an integral part of the Eurosystem.

3 Digital innovation can foster financial stability

Besides ensuring the stability of the currency, central banks’ main task is to safeguard the stability of the financial system as a whole. I am sure you will all agree when I say that new technology can simultaneously promote stability and bring about new risks.

As a central bank, we have to play a dual role. On the one hand, we want to enable digital innovation, harnessing its potential for financial stability. On the other, we have to keep an eye on potential risks arising from digital transformation. It is our job to supervise all risks to financial stability.

Be assured that central banks are looking out for this. If I could make one wish here, it would be for digital innovation to factor in financial stability by design.

The COVID-19 crisis is certainly providing an additional boost to digitalisation, particularly in the financial sector. But let me be clear: increasing use of online banking, digital payments and video chats with clients are by no means the digital transformation of the future. This is no more than the adoption of technologies invented in the last century.

But the pandemic might encourage all players in the financial system to pursue innovation more quickly and more radically. Indeed, the digital revolution is still to come in finance as well as in other industries.

Artificial intelligence, machine learning, cloud technology, distributed ledger, quantum computing, an ever-growing volume of data – whatever buzzword you name: all of these have the potential to disrupt each and every business model. And, as we learned recently, including that of central banks.

I believe that we are at the beginning rather than at the end of digitalising the financial system. The magic moment for financial technology and fintech companies may still be to come.

New technologies have the potential to make the whole financial system more resilient. For instance, financial institutions can use AI to better detect and ward off cyber-attacks. Early warning systems for loan defaults based on automatically evaluated economic news could improve risk management.

Digital innovation can enhance the stability of individual institutions and of the entire financial system. If we manage to strengthen financial stability through digital innovation, this could make supervision and central banking more effective and more efficient.

4 Central banks’ digital innovation activities

Central banks are themselves innovators in the financial system – but we need your imagination. A digital approach to finance is not merely limited to private actors. It extends to the entire financial ecosystem. And central banks are joining in, too.

All around the world, we are exploring the risks and benefits of issuing central bank digital currency. The Eurosystem is looking into different concepts for a “digital euro”.

Real-time monitoring of the financial system is a fascinating vision for central banks. Just recently, at the “Bundesbank Innovation Challenge”, 10 start-ups pitched for the most innovative solution for risk monitoring at our institution.

Innovation needs space – mental space, certainly, but also physical space. We at the Bundesbank are currently building InnoWerk, a collaborative workspace in the city centre of Frankfurt not only for our staff, but also for the international central bank community. Together with Banque de France and the European Central Bank, we are establishing one of nine global BIS Innovation Hubs around the globe.

But InnoWerk will not be limited to the central bank community. We wish to involve the broader ecosystem – with you, players from the start-up scene, experts from academia and any other creative minds. We want to make this a win-win situation in which the Bundesbank benefits from technology and creativity from outside, while start-ups become familiar with the world of central banking.

It is safe to say that we are not and will not become a fintech. But we are constantly reaching out to the digital finance community.

5 Conclusion

Now, you might be wondering: “what’s in it for me?” Yes, central banks are relevant to digital innovation in finance – my first point. Yes, digital innovation can foster financial stability – my second point. And yes, central banks are innovators themselves – my third point.

Beyond this, I hope you all agree that digitalisation is not just about making money; it is about making the world a better place, too. For me as a central banker, a better world means a financial system which is sufficiently and sustainably stable.

I am convinced that digital innovation will make us better able contain the threats and vulnerabilities in the financial system. All of you can contribute to this – and I very much hope you will!

The transformation of the financial system may not only make finance more digital, but also more stable and more resilient.

To that end, cooperation between central banks as Bundesbank and the fintech community is key. We are interested in establishing close ties to the digital financial ecosystem.

We might come from different worlds. But we can – and should – learn from each other and work together. Let us bring together stability and innovation!

I am looking forward to an inspiring event today, with insightful panel discussions and many shared ideas. And I hope to see some of you at InnoWerk soon!

Ukrainian Ministry of Digital Transformation to develop virtual assets and to facilitate CBDC infrastructure with the Stellar Development Foundation

On December 28, the Ministry of Digital Transformation of Ukraine and the Stellar Development Foundation (SDF) signed a Memorandum of Understanding and Cooperation, within which they will work on the development of a strategy for virtual assets in Ukraine.

Under the Memorandum, the Ministry of Digital Transformation and SDF will work to develop a modern virtual asset market infrastructure and enhance Ukraine’s status as an innovative digital country in the financial market in Eastern Europe.

“The Ministry of Digital Transformation is working on creating the legal environment for the development of virtual assets in Ukraine. We believe our cooperation with the Stellar Development Foundation will contribute to development of the virtual asset industry and its integration into the global financial ecosystem,” said Oleksandr Bornyakov, Deputy Minister of Digital Transformation for IT Development. “Another important aspect of this cooperation is contributing to the development of the infrastructure for a Ukrainian national digital currency. Most of the world’s leading countries are developing their own national digital currencies. The National Bank of Ukraine has been researching the possibility of CBDC implementation since 2017. It demonstrates Ukraine’s movement towards one of major financial trends. At the Ministry, we aspire to ensure our country’s adaptation to technological innovations and competitiveness in the financial market in Eastern Europe.”

The memorandum outlines the core focus of the partnership as follows:

  • cooperation on the development of the virtual assets market in Ukraine;
  • provision of support to projects related to virtual assets;
  • implementation and regulation of stablecoin circulation in Ukraine; and,
  • facilitation of the development of the digital currency of the Central Bank in Ukraine.

“We believe digital assets and national digital currencies are one of the most important innovations of our lifetimes and we are excited to play a role in the creation of Ukraine’s digital asset infrastructure,” said Denelle Dixon, CEO and Executive Director, Stellar Development Foundation. “Through the leadership of the Ministry, Ukraine has demonstrated its commitment to fostering an environment of innovation for the digital economy. We look forward to working with the Ministry and other stakeholders to digitize the hryvnia, to bring Stellar-based tools and services to the people and businesses of Ukraine, and to introduce new partnership opportunities in Ukraine to businesses in the Stellar ecosystem.”

Stellar Development Foundation will officially launch its activity with Ukraine in January 2021.


About Stellar

Stellar is a decentralized, fast, scalable, and uniquely sustainable network for financial products and services. It is both a cross-currency transaction system and a platform for digital asset issuance, designed to connect the world’s financial infrastructure. Dozens of financial institutions worldwide issue assets and settle payments on the Stellar network, which has grown to over 4.7 million accounts. 

About the Stellar Development Foundation

The Stellar Development Foundation (SDF) is a non-profit organization that supports the development and growth of Stellar, an open-source network that connects the world’s financial infrastructure. Founded in 2014, the Foundation helps maintain Stellar’s codebase, supports the technical and business communities building on the network, and serves as a voice to regulators and institutions. The Foundation seeks to create equitable access to the global financial system, using the Stellar network to unlock the world’s economic potential through blockchain technology.

Digital Transformation – Digital Leadership

Digital Transformation – Digital Leadershipby Casper Tribler


Casper Tribler – Experienced Telecom Prof.

Our ability to digitally transform companies, governments, healthcare, education, legal systems, law enforcement, communication, finance etc. are pushing forward new digital strategies and increased focus on digital leadership. Such leadership is required across all levels of the horizontal and vertical organizational grid, and across all age groups. The current workforce wants to work for businesses that are digital ambitious, and being a digital risk taker is becoming a necessity for employees to stay attractive as well as organizations to stay competitive within their core activity.

To stay competitive as an employee and an organization Digital Transformation has to be an integrated part of who we are and what we do.

A study presented by Deloitte explains that employees want to work for digital leaders, and across the age groups from 22 to 60 the vast majority of respondents want to work for digitally enabled organizations. 4 Leaders need to bear this in mind in order to attract and retain the best talent needed to transform their digital strategy into digital reality. Many leaders tend to believe that Digital Transformation is driven by technology, but it could not be further from the truth; as Cap Gemini explains it:

Digital transformation is first and foremost a business transformation. People, not technology, are the most important piece in the Digital Transformation puzzle. 1

What is Digital Transformation?

For some Digital Transformation is just another term that is used with increased frequency these days together with other trendy terms such as Disruptive Innovation, Internet of Things, Data Lakes, Machine Learning, SMAC, Code Halos etc.

I have heard the term Digital Transformation described in a rich variety of ways by my industry colleagues within IT and Telecom, and it is evident that Digital Transformation means different things to different people. Some describe Digital Transformation as creating a digital culture centered around a strong brand idea, or that it is about getting a company to be more digital native, acquire new skills and capabilities to be data driven and ultimately more customer centric, and some refer to the concept of ‘going paperless’, or that Digital Transformation changes companies so they can take advantage of new opportunities and face the challenges from the technical world. My response to these definitions are that Digital Transformation is all that and much more. However, this leaves us with a rather illusive concept and it would be quite helpful if we had a more defined understanding of Digital Transformation.

From studying various publications, I managed to put together below definition that I would like to share with you:

Digital Transformation

Strategically embrace new digital innovations enhancing the customer experience


  • Strategic: Ever evolving strategic exercise promoted by the relevant leadership, which are then required to be translated into clearly defined tactical and operational goals ensuring long-term commitment and ongoing momentum.
  • New digital innovations: Move the organization forward compared to its current digital capabilities enabling new types of innovation and creativity in a particular domain, rather than simply enhance, support and rely on existing technologies. The transformation is focused on digital initiatives and integrations within the organization, such as for example Internet of Things, or social, mobile, analytics and cloud (SMAC) and other underlying IT architectures such as big data, Data Lakes etc.
  • Customer experience: Ensure that the overall goal from the Digital Transformation is to deliver an enhanced customer experience having a positive impact on the organization’s performance for example on its revenue, profit, share price etc.

What drives digital leadership?

The persistent evolution of technology is a source of constant inspiration to redefine the way we exist (co-exist) as a species. Digital Transformation has become the ultimate challenge in change management because it impacts not only organizational structures and strategic positioning, but all levels of society (every task, activity, process).

Leaders must constantly challenge their organizations to ensure that this technology-enabled change can unlock productivity gains and competitive advantages, and understand where and how the fundamentals of their current operations could be unsettled by agile new entrants or new business models.

Today’s leaders need insights to validate strategic and tactical decisions quickly, which requires access to large volumes of data, from an increasing number of different information channels and preferably real-time. As a consequence, leaders are becoming more personally involved in generating their own tailor-made insights rather than simply reading a pre-canned report or analysis. And if you are an ambitious leader that likes to be in control of your own destiny, what better way to reach such enlightenment than spearheading the Digital Transformation of your organization?

What is digital leadership?

This may come as a surprise to some people; Digital Transformation does not demand mastery of the technologies. Instead, it requires commercial leadership to articulate the value of digital technologies as a critical part of the organization’s future. 4

The success of Digital Transformation is greatly dependent on the organization’s ability to commercialize its digital strategy.

Digital leaders are more likely to have a data-driven mentality when it comes to decision making rather than taking what is presented at face value; these digital leaders has a need to verify their commercial decisions through analyses: 5





Further to the argument that the core success driver to Digital Transformation is not technology nor technological mastery, is supported by Aberdeen Group’s study from October 2015 stating that digital leaders are:

  • 73% more likely to have strong analytical knowledge within non-technical roles.
  • 65% more likely to have processes in place for defining and communicating business needs for analytics.
  • 38% more likely to have policies and/or tools in place for governing end-user access to data.

Successful digital leaders also understand that to get maximum ROI out of investing into Digital Transformation they have to push their organizations to accelerate the flow of information between departments, and make that information available more quickly and more broadly across the organization. In more concrete terms this means creating an environment that nurtures data-driven insight thinking, implementing clear user needs and strong policies for data governance, support more efficient decision-making processes delivering relevant capabilities to the right job roles at the right time. These are all characteristics that digital leaders foster within their organization ultimately building the foundation for lower risk, increased profitability and faster management decisions.

Why should leaders take digital seriously?

Today’s most critical decisions not only rest on the business feel and gut instinct of our leaders, but to a greater extend requires convincing insights. The involvement of data may once have been purely supporting or affirming in nature, but now plays a more central role. Even shareholders are depending more heavily on a data-driven mindsets to drive their investments forward and Digital Transformation has the tools they need to achieve their vision.

If leaders wish to stay relevant in the future adopting digital risk-taking and formulating digital strategies – if not already – will become the norm. So if leaders are not motivated by the incredible opportunities Digital Transformation in itself offers, then keeping once own job might just do the trick. Digital Transformation is here to stay and the sooner leaders get to terms with this fact the better as they will be able to take advantage from enhanced knowledge sharing, improved process efficiency, revenue growth and increased profit as findings show from Aberdeen Group study in October 2015:



Digital Transformation is here to stay

Digital Transformation is a never ending endeavor and in these disruptive times we live in the frequency of formulating new digital strategies and adopting new technologies is only expected to increase. Our future leaders must embrace Digital Transformation as their mission, and define and deliver winning digital strategies.



As many leaders have already started their organization’s digital exploration, those who has yet to begin need to take this development seriously. The sooner they transform themselves into digital leaders and start their own Digital Transformation journey, the less catching up they have to do and the more relevant they will become to their shareholders, management and employees going forward.



More information, questions or comments




Thank you for reading this article “Digital Transformation – Digital Leadership”. Please visit me on LinkedIn to find my previous articles covering Big Data (RoI and Big Data), Data Lakes (Introduction | How does it work? | Risk Management – Part 1 | Risk Management – Part 2), Predictive Analytics, Internet of Things, Customer Insight Analytics (Part 1: Introduction | Part 2: Solutions | Part 3:  Implementation | Part 4: Conclusion), and more: LINK

Please connect to me on LinkedIn (LINK) and Twitter at @CasperTribler.

For more information on this topic please contact me on:

  • Email: casper.tribler@gmail.com
  • Skype ID: caspertribler


 Special thanks

Special thanks to below sources of inspiration and references:

  1. https://www.capgemini-consulting.com/digital-transformation
  2. https://econsultancy.com/training/digital-transformation/
  3. https://youtu.be/2q_lWLm5qtg
  4. “Strategy, not Technology, Drives Digital Transformation”. MIT Sloan Management Review. Retrieved 2016-01-18. Deloitte University Press
  5. THE ANALYTICAL EXECUTIVE: GETTING THEIR HANDS DIRTY WITH DATA, October, 2015 by Michael Lock from Aberdeen Group
  6. IBM Podcast. How to build a highly collaborative and data-driven organization. https://itunes.apple.com/us/podcast/ibm-analytics-insights-podcasts/id605818735?mt=2&i=366448947


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