ECB President Christine Lagarde’s comments to the Committee on Economic and Monetary Affairs of the European Parliament positioned digital transformation as an important priority for Europe’s economic recovery effort.
Lagarde: “Another key dimension is the digital transformation. Here, the recent lockdowns have accelerated the adoption of digital technologies on a broader basis. Now is the time to expedite the digital transformation on a more permanent basis and bring the EU to the frontier of the digital economy.”
ECB President Lagarde’s comment about digital transformation is a reflection of the new economic reality in the wake of COVID‑19. She is making these comments in the context of what she believes will help provide a competitive advantage to the region’s economies. And the formally recognized central role of digital technology will also lead to new thinking about digital as a macro-level risk. This will ultimately require new models for pricing digital risk as an increasing majority of the value that companies generate will be digital in nature—a reflection of the ‘great acceleration’ that has occurred over the past three months.
Once policymakers and regulators in Europe and beyond begin to reckon with the increasingly dominant position of digital in the economy far beyond Big Tech, one major consequence will be that focus will shift to how to best manage the downside financial risks inherent with this transformation due to inadequate cyber security governance in the corporate sector.