Dutch regulators urge Europe to build its own tech sector amid rising geopolitical risks

The financial sector is becoming increasingly dependent on IT service providers outside Europe. This poses significant risks in the current “harsh geopolitical climate,” warn De Nederlandsche Bank (DNB) and the Netherlands Authority for the Financial Markets (AFM) in a report published Monday. States could exploit this dependence as leverage in a trade conflict.

The DNB and AFM mainly referred to American suppliers of IT services, without naming any companies specifically. As an example, the institutions mention a scenario in which services suddenly come to a halt as a result of sanctions. DNB and the AFM further observe that financial institutions often depend on the same external providers, meaning that a single outage or cyberattack could simultaneously affect many of them.

While DNB and the AFM acknowledge that the financial sector recognizes the risks, they urge additional measures. “If the geopolitical situation deteriorates further, Europe, without a tech sector of its own, will become a plaything of the whims of other power blocs,” they write. To avoid such dependence, they argue, Europe must invest in building its own technology sector and create European alternatives to bolster resilience.

“Only through European cooperation and greater strategic autonomy can we strengthen resilience in a sustainable way,” says Laura van Geest, chair of the AFM. Steven Maijoor, who heads supervision, added that developing European digital initiatives is crucial to reducing the sector’s exposure to geopolitical risks.

The Dutch Banking Association (NVB) expressed its support for the findings of DNB and the AFM. “Banks have long advocated strengthening the investment climate for European companies so that, in time, fully developed European alternatives can be created,” the NVB stated.

At the same time, banks are already preparing for certain scenarios and are sharing information about specific threats and attacks.The NVB adds that they collaborate closely with DNB, the National Cyber Security Center, and intelligence agencies to strengthen their defenses.