Tag: euro

7 in 10 fear the planned digital euro will leave consumers vulnerable to technical glitches and cybercrime

More than seven in ten (73pc) compliance experts in the Irish financial services sector are concerned that the planned digital euro could leave consumers and businesses vulnerable to cybercriminals and technical glitches. While more than six in ten (63pc) compliance experts in the financial sector don’t believe there is a need for a digital euro.

This is according to the findings of a new survey by the Compliance Institute, which polled 175 compliance professionals working primarily in Irish financial services organisations nationwide. The survey examined attitudes towards the digital euro, which has been described by the European Central Bank (ECB) “as an electronic form of cash for the digitalised world”. The ECB started preparatory work on the digital currency in November 2023 with the earliest possible launch date recently mooted as 2026[1].

Privacy fears around the currency also rank highly in the list of potential cons, with more than half (51pc) concerned that there could be issues around data protection and privacy if the digital euro is introduced. However, approximately half of all respondents accepted that the new digi currency may well bring benefits such as lowering the cost of banking and leading to greater convenience and efficiencies in transactions.

Commenting on the survey findings, Michael Kavanagh, CEO of the Compliance Institute said:

“Just 6pc of respondents said they have no concerns about the digital euro – which mean that the remaining 94pc feel some level of unease about the planned new currency. It would seem that the ECB has much work to do to allay fears around it ahead of any launch.”

The Top Five concerns which compliance professionals have about the digital euro, according to the survey, are:

  1. Consumers would be at the mercy of technology and could be unable to access their money in the event of a glitch (73pc expressed this worry)
  2. Its digital nature makes it susceptible to hackers, fraudsters and cyberattacks (73pc)
  3. The potential for consumer confusion, with a likely lack of knowledge on how to use the digital currency (65pc)
  4. It could lead to issues around data protection and privacy (51pc)
  5. It could displace and lead to less availability of cash (50pc)

Mr Kavanagh added:

“The thinking behind the digital euro is that it would give consumers the option to use central bank money in a digital format, complementing banknotes and coins – however, our survey found that there are concerns that the rollout of the currency could in time lead to less availability of cash. There are also clearly fears that consumers could be at a financial loss with this digital currency, particularly in relation to accessing their money in the event of a technical glitch – and potentially falling prey to fraudsters. Interestingly, almost half (47pc) of those surveyed were worried that the digital euro could give more power to tech and fintech companies.”

 

Asked in the survey what they believed the main advantages of the digital euro to be:

  • One in five (20pc) can see no benefits to its introduction
  • Almost six in ten (59pc) believed it would lead to more efficient transactions, with a similar number (56p) stating the convenience of the digital euro would be one of its main advantages.
  • Half believe it will reduce banking costs and be a cheaper way for consumers and businesses to pay for things and for people to exchange money.
  • Only one in four (24pc) felt it would offer a safer alternative to cash and card
  • Less than one in three (30pc) said the digital euro would be less vulnerable than existing currencies to counterfeiting.

Mr Kavanagh added:

“The ECB has said that the digital euro would make people’s lives easier by providing a digital means of payment universally accepted throughout the euro area, for payments in shops, online or from person to person. However, with a ream of avenues already in place for electronic and digital payments, including contactless mobile phone payments and electronic bank payments, it is understandable that so many compliance professionals believe the digital euro is already redundant. This, combined with the extent of concerns around the digital euro, shows that the ECB has a job ahead of itself in convincing the Irish and wider European public that this is a safe, inclusive and easy-to-use currency.”

 

[1] See Interview with Christine Lagarde, President of the ECB, on 8 May 2023. Fabio Panetta, Member of the Executive Board of the ECB, also estimated a launch date of 2026. Header image credit 

Ireland Tops Euro Poll for Working from Home Growth

Of the 27 EU member states, Ireland has come out on top when it comes to how its workforce has adopted remote working. Malta; the Netherlands, Germany and France also feature in the top five (See Appendix).

BNP Paribas Real Estate Ireland (BNPPRE) reports that its analysis of Eurostat data shows that, while the Netherlands has the highest percentage of its workforce engaged in remote working (over 50%), Ireland is leading the charge in terms of how rapidly remote working is taking the place of traditional office-based work.

In 2019, just 7% of Ireland’s workforce said they “usually” work from home – this figure soared to 25% in 2022, the biggest percentage point increase of any EU country.

Speaking to the analysis, John McCartney, BNPPRE’s Director of Research,

“Ireland’s adaptability throughout the pandemic has been remarkable in many ways, not least the ease with which businesses and employees alike adjusted their working models.”

“Of course this has had knock-on implications for commercial property. Over time remote working has enabled employers to adopt hot-desking and rostering systems which reduce the amount of office space they need to carry per employee.  In the absence of jobs growth this would subtract from the demand for office accommodation.  But Ireland is one of the EU’s most service-driven economies and, since the onset of Covid, we have created service sector jobs at more than twice the average rate in the EU.”

 The impact of remote working on office demand has also been somewhat mitigated by a shift in occupier preferences.

 “In line with a wider European trend, Irish organisations are typically now seeking less, but better quality office space.  This is driven by sustainability objectives and a need to optimise the employee experience in a tight labour market.”

The BNPPRE analysis shows that 27.9% of Ireland’s employees work in desk-based sectors compared with an EU average of 24.6%.   The number of desk based jobs in Ireland has risen by 15% since the onset of Covid-19 in Q1 2020, compared with an EU average of 6.9%.