Just over a year ago, Paulina Dejmek Hack took on the role of Director for General Affairs at the Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA). She answers some questions about digitalisation, sustainable finance – and what steps she thinks need to be taken to get more women in leading roles in finance.  

Before taking your current position, you were a key part of the UK Taskforce negotiating team, led by Michel Barnier. How was this experience and what do you take away for your current portfolio?

This was a very interesting experience. It was also in some ways a very sad experience. I continue to feel that, in this complicated world in which we are not surrounded only by friends, we will always be stronger together in Europe. In terms of what I take from it to my current job, first of all it was a very useful managerial experience. I had the privilege of working with a fantastic team in what was an extremely complicated and often stressful context. I think I also certainly improved my negotiation skills! And negotiating such a comprehensive agreement as the EU–UK Trade and Cooperation Agreement really gives you an overview of many different policy areas – there is not much on financial services in the Agreement but it covers everything from justice and home affairs, to fish, to energy policy, to transport. That was not only extremely interesting but also very useful for me now as Director of a horizontal directorate where we also deal regularly with policies of other DGs.

Sustainable Finance has become a key topic in international fora, both multilateral and bilateral. How should we best articulate our international outreach on sustainable finance with delivering on our EU framework, on taxonomy, on disclosures, on investment tools & standards?

Sustainable finance is a really important area, and it’s very interesting to see how the entire global debate has shifted on this matter. I believe we were thinking about this in the EU earlier than many others were: We started the work on the Taxonomy Regulation a few years back and we set up the International Platform for Sustainable Finance in 2019 – in a world in which there was much less focus on these issues than today. Notably as regards the USA, which was in a very different place back then compared to where they are today on this matter. So it’s interesting to see how this has shifted from being a little bit of a niche debate to really becoming mainstream. And this is an area in which the EU is taking the lead globally. We have done a lot already: on disclosures, on taxonomy, on labels, such as the green bonds. The EU is already one of the global leaders in terms of issuing green bonds. Now, we need to reflect on how we bring this experience into the international discussions in the most useful way. We are very active in the international debates, both bilaterally with our partners, and internationally. I mentioned our International Platform already, and then we have the whole multinational debate - the G20, for example, is very active on sustainable finance. And in our bilateral regulatory dialogues, sustainable finance is always top of the agenda – with the United States, with Japan, and with Canada, to mention some examples. What is important is that we strive for national and regional approaches that are, if not the same, at least ‘interoperable’ in a global context. We have global markets that are integrated so this is very important for investors and companies.  

How do you see the evolution of financial services in 5-10 years from now? How will digitalisation in particular shape the way companies are getting funding, and consumers are investing or paying? How to best protect them in this context?  

Well, that’s the hundred-million dollar question, isn’t it! What we know today is that the world of finance is changing very quickly. We saw it starting already a couple of years ago with restructurings in the banking sector and closing down of local offices. Of course, the pandemic has accelerated this transition to online and digital banking. There are a lot of changes when it comes to how financial institutions run their business. And so much is happening in terms of new products. We speak a lot about crypto assets but that’s not the only thing – there are a lot of new innovative financial products coming our way. The question is what can we do about this? What should we do about it? We have taken some initiatives already at EU level – on digital operational resilience with the DORA proposal, which is making its way through the legislative process; on markets in crypto assets we have the MICA proposal. With both these proposals, it seems to me that the EU is taking the global lead and there is significant interest in what we are doing. And there is a lot to do going forward – we are working on our retail strategy, instant payments, open finance – all issues that are linked to the digitalisation of the financial sector. Retail investors’ habits were already changing and this has really accelerated with the pandemic. We have moved on from a world where most people would go to their bank and ask for investment advice – this is certainly not the way you go about it if you are 25 years old today. So it is important that our legislation takes this new reality into account – while also ensuring that consumers are well informed and understand the possible risks with some of these new instruments. We also have to remember that, although digitalisation offers many opportunities, there are people – older people in particular but others too – who do not have the necessary levels of digital education and who are not sufficiently connected to participate in these developments. So we as legislators need to be very mindful of financial inclusion. Part of this is down to financial education and digital skills that you can learn at any stage of your life. But we need to be mindful as we approach digital innovation from the perspective of new opportunities, new products, easier access to financial markets – and also be aware that there are people who are still dependent on more traditional financial services. We must make sure that we don’t lose sight of that when we take our rules and regulations forward.

Women are still vastly outnumbered by men in the financial services sector, at least at higher levels. What has your experience been, as a woman, of building a career? And what steps do you think should be taken to get more women in leading roles in finance, both in industry and as regulators or supervisors?

When I started my career in financial services, more than two decades ago, it was really quite difficult to be a young woman in this world. It does seem to me that this has changed a bit for the better. You definitely see more women, of all ages – and some have made it to the top. We now have a female Commissioner for financial services, Mairead McGuinness. Christine Lagarde, President of the European Central Bank (ECB), is another inspiring example. And beyond financial services, it’s inspiring that the heads of three of the EU institutions are women – the ECB as I said, the European Commission, and the European Parliament. I think it is really important that there are these good examples for younger women. But it’s also clear that there’s still a lot to be done and the sector is still very male dominated, as can easily be observed at any financial services conference. In my own professional developments, I have been privileged to get support from great and visionary men – and women. The responsibility we all have as women in finance is – I think – to try to be that good example for younger colleagues. It seems to me that things are changing quicker in the public sector than in the private sector. And I think that legislation can sometimes be part of the solution. In recent years, and with increasing age, I have become more in favour of quotas – sometimes legislation can help to push things in the right direction.

This interview was recorded before the Russian aggression against Ukraine.