Central Bank Governor Professor Philip Lane has said the bank has to make sure that it keeps abreast of the changing technological environment.
He also said it has to ensure it is able to assess the level of preparedness of regulated firms, both in the authorisation process and during ongoing supervisory engagement - which will be quite challenging.
The Governor made his comments at the Financial Services Ireland - Ibec annual lunch today.
Professor Lane also said that regulators should embrace technological advances that can contribute to positive regulatory outcomes by developing better tools, undertaking better analysis of "Big Data" in the identification of financial risks and the allocation of regulatory resources.
To this end, the Governor said that the Central Bank is committing "significant" resources to improve its data architectures and set up quantitative analytical teams for its banking, insurance and markets directorates.
Professor Lane also told today's gathering that conflicting forces are at work in reshaping the structure of the financial sector.
"In one direction, economies of scale and scope may result in a higher degree of consolidation across financial services providers," he stated.
But "in the other direction, there are other forces that may lead to increasing fragmentation of the provision of financial services, with specialist providers increasing the level of competition in individual market segments and threatening the integrated model of universal banking," he added.
Governor Lane said "the challenge for policy makers is to understand and attempt to appropriately regulate the evolving financial services landscape, while at the same time balancing often-competing objectives of competition and choice, financial stability, and the effectiveness of macroeconomic policies."
