Sovereignty in the financial sector: Report on the European state of affairs

Europe’s financial sector stands at a crucial point in its digital transformation. While national systems like iDeal, Bizum, and Wero demonstrate successful European-led fintech innovation, the foundational digital infrastructure remains dominated by non-European providers, especially U.S. hyperscalers such as Amazon, Google, and Microsoft. With 92% of Western data stored in U.S.-owned infrastructure, this dependency raises strategic concerns about autonomy, sovereignty, and systemic risk - especially in a volatile geopolitical climate. This report frames the situation as a trilemma between autonomy, control, and innovation. Autonomy involves building long-term resilience through independent infrastructure and strategic flexibility. Innovation remains critical, as Big Tech continues to define consumer expectations and set new industry standards. However, aligning too closely with these platforms can erode institutional control over data, customer relationships, and compliance. Control, in this context, refers to the regulatory oversight needed to safeguard stability, which is increasingly challenged by the global and fast-evolving nature of digital ecosystems. To address this trilemma, the report calls for actionable strategies that balance all three imperatives. It emphasizes the importance of regulatory frameworks like DORA while urging institutions to reduce dependency on foreign infrastructure through diversification and investment in sovereign solutions. The overarching goal is not digital isolation, but strategic resilience - empowering European financial institutions to innovate securely, govern effectively, and uphold digital sovereignty amid rapid technological change.