The need to preserve human customer service and consumer protection in the new digital era
Rapid digitalisation and the rise of fintech are transforming the financial sector, creating both opportunities and challenges for professionals, consumers and supervisory authorities. At the same time, traditional banks are being called upon to adapt to this new environment.
As part of the Cyprus Forum, Financial Ombudsman Valentina Georgiadou, Director General of the Institute of Certified Public Accountants of Cyprus (ICPAC), Andreas Papadatos, and Irena Georgiadou, Vice-President of the Glafcos Clerides Institute and former Chairwoman of Hellenic Bank, participated in a discussion titled: “Finance Beyond Traditional Banking: Digital Banks, Crypto Assets and Consumer Protection.”
The discussion took place on the final day of the Cyprus Forum, on September 30, and was moderated by Tasos Zachos, CEO and Partner of Fortune Greece.
Each participant highlighted different aspects of the emerging financial landscape from their respective perspectives.
Irena Georgiadou: Traditional banks have no choice but to adapt
Irena Georgiadou stressed the need for traditional banks to adapt further and faster to the new reality, arguing that the distinction between digital banking and traditional banking will gradually cease to exist.
“In the future, what we call digital banking will not be seen as something different, because banking itself will be digital. So traditional banks have no choice. They have to change. They have not managed to do so successfully so far, but I think they will continue trying, because they will either change or be pushed out of the market,” she said.
The need to preserve human customer service in the digital era
Georgiadou also noted that digitalisation is not inclusive for everyone, particularly older age groups and citizens who are unfamiliar with new technologies.
She stressed that the benefits of digitalisation are significant and should not be underestimated, as it has, among other things, reduced costs and broadened access to financial services.
At the same time, however, it creates an inclusion challenge for those who struggle to keep up with the transition.
Against this backdrop, she suggested that supervisory authorities may need to exert greater pressure to ensure that human customer-service channels remain available to citizens who continue to need them.
Credible supervision as a competitive advantage
Georgiadou also addressed the relationship between innovation and regulation, stressing that technological development and strong supervision should not be treated as opposing forces.
Instead, she argued that credible supervision can become a competitive advantage for a country and, in Cyprus’ case, could develop into a key element of its competitiveness as a financial centre.
“As Cyprus, we need to change our narrative somewhat. Until recently, when we talked about Cyprus’ competitiveness as a financial centre, we talked about our low taxation, the cost of establishing a business, the sun, the sea and the fact that everyone in Cyprus speaks English very well. Today, however, serious international financial companies are looking for something else as well. They want to know exactly what the supervisory rules are, that they are consistently applied to everyone and that supervisory authorities are flexible and understand the fintech business models presented to them,” she said.
Andreas Papadatos: The auditor’s role from financial assurance to a broader role of trust
ICPAC Director General Andreas Papadatos discussed how the accounting and auditing profession must adapt to the new environment.
He noted that technology is constantly creating new possibilities, but at the same time it is creating new areas in which consumers, investors, company management and regulators themselves require some form of independent assurance.
As examples, he pointed to the reliability of the data on which AI systems operate, as well as the need to assess cybersecurity controls.
“This is where I see an evolving role for the accounting and auditing profession from Financial Assurance towards a broader Trust & Assurance role. But this also increases our responsibility,” Papadatos stressed.
This evolution, he noted, creates new opportunities while simultaneously increasing the profession’s responsibility to meet the demands of the new digital financial landscape.
Valentina Georgiadou: Security and trust at the forefront
For her part, Financial Ombudsman Valentina Georgiadou pointed out that financial services are changing at an exceptionally rapid pace, making it difficult for the regulatory framework to adapt at the same speed.
In her view, the key challenge is to ensure that this transition provides effective protection for users, including through better coordination among the relevant supervisory authorities.
Security and trust, she said, are fundamental prerequisites for the sector’s development, as citizens are more willing to invest when they know that a protection mechanism exists if something goes wrong.
At the same time, she stressed the importance of providing citizens with timely information. The new era brings new terminology, products and services, but also new risks, making it essential for consumers to be properly informed before problems arise rather than seeking information only afterwards.
In this context, she described financial literacy as particularly important, noting that the rapid changes taking place in the sector are expected to create new forms of risk for which both citizens and the relevant authorities must be adequately prepared.
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