The European Union is looking to phase out Russian fossil fuels more quickly as part of new sanctions against Moscow, according to European Commission chief Ursula von der Leyen. This comes after pressure from U. S. President Donald Trump to stop buying Russian oil as a response to Russia’s war in Ukraine. EU officials are in Washington discussing coordination on these sanctions.
Von der Leyen stated that the upcoming 19th package of Russia sanctions will focus on phasing out Russian fossil fuels faster, including actions against a “shadow fleet” and third countries. The EU has already banned imports of seaborne crude oil from Russia, which represents over 90% of its oil imports, and is working on plans to completely eliminate Russian oil and gas by January 1, 2028.
However, Hungary and Slovakia oppose measures on gas imports, fearing increased energy prices. The EU needs unanimous agreement for sanctions, while other legal proposals can pass with a reinforced majority. Russian fuel revenues are crucial for funding its war in Ukraine.
When the 2025 cloudburst hit Buner, a district located in northern Pakistan, villagers described how torrents of water came down upon their dwellings with such fury as never before seen. Entire settlements vanished behind walls of mud and rock. Survivors stood amidst the rubble of their houses, blaming fate, blaming climate change, and waiting for relief from the provincial government. But the mountains behind them spoke a different tale. Its slopes, stripped of forests and scarred by marble quarries, had long been preparing for this disaster.
Khyber Pakhtunkhwa is a province in northern Pakistan where the marble industry has grown very fast. By 2023, more than 6,000 marble factories were working in that province. These factories were mostly found in the Buner, Mardan, Swabi, Malakand, and Mansehra areas and also in the industrial belt on Warsak Road up to Mohmand and Bajaur. In just one city area alone, there were 350 units that Peshawar hosted. Yet alongside this economic boom came a quieter tragedy: about 1,091 units reportedly ran without environmental clearance from the Khyber Pakhtunkhwa Environmental Protection Agency (EPA). Only 133 factories held the required no-objection certificates (NOCs). The rest continued to blast mountains, dump slurry, and strip forests unchecked.
The ecological costs have been devastating. Global Forest Watch figures demonstrate that Khyber Pakhtunkhwa lost an average of 4,690 hectares in tree cover per year between 2020 and 2024. Swat’s forest cover, which at one time was 30 percent in 1947, has now decreased to just about 15 percent in 2025. Deforestation led by marble quarry expansion and firewood extraction that caters to the needs of the urbanizing population results in barren slopes replacing natural watersheds. Mountain blasting destroys soil structure, leading to erosion and reducing the water absorption capacity of the land, thereby ensuring flash floods accompanied by landslides with every spell of heavy rain. The Buner flood was not a natural calamity, but rather it was the net result of years of environmental neglect by the PTI government.
Villagers, whose words seldom reach the ears of policymakers, tell of dry streams, washed-away topsoil, and lost animal corridors that happen when the forest disappears. Farmers watch their yields decline while factory owners argue the industry brings jobs and export earnings Pakistan needs. Yet the floods that now strike with greater intensity destroy far more than they ever build.
Here, the climate debate takes a dangerous turn. Pakistan is right to point out that it happens to be among the top five most climate-vulnerable countries while contributing less than one percent to global carbon emissions. But local actions—unregulated mining, illegal riverbed construction, and deforestation—weigh heavily in magnifying the impacts of a changing climate. Extreme weather may be global, yet the scale of destruction in places like Swat and Buner reflects local choices as much as global injustice.
What makes this tragedy sharper is the economic paradox at its core. The marble industry contributes almost $1.5 billion every year to the economy of Pakistan, and it is this region that supplies a major portion of exports from the country. But this same industry depletes those very ecosystems on which agriculture, tourism, and rural livelihoods depend. When floods destroy the crops, roads, and houses, the damage is more than what profits could be made out of marble extraction, hence leaving the communities in a cycle that has economic gains disappearing with ecological losses.
The provincial government’s unwillingness to act sits at the heart of the crisis, permitting unregulated factories to function as environmental grey zones. The provincial EPA remains underfunded and politically sidelined. Deforestation bans exist on paper but are rarely enforced. Mining royalties swell provincial coffers, while watershed restoration receives scant attention. More than one thousand illegal factories are operating without NOCs, and only a few face closure orders. The trade-off between short-term revenue and long-term ecological survival remains tilted towards profit.
The paradox is striking. The provincial government continues to blame the Global North for carbon emissions yet does not want to place regulations on companies that are destroying its own watersheds. International climate finance and disaster relief from Islamabad come after every flood, but the mountains continue to be stripped, the diggings continue expanding, and the risks multiply.
This does not have to be the case. If NOCs are strictly enforced, if mining companies undertake mandatory watershed restoration, and if provincial climate adaptation plans are integrated with industrial licensing, the trajectory can be altered. When mountain quarrying was regulated in Turkey and Nepal, mining was allowed to proceed, but only under conditions of ecological stewardship, which is only possible under strong governance.
Until then, the people of Buner, Swat, and Malakand pay. With every flood deadlier than the last, every disaster is met with a cycle of blame and appeals for relief. Yes, climate change is a global issue, but in Khyber Pakhtunkhwa, it’s as much about local negligence as it is about distant smokestacks. Without governance reforms, no amount of international aid can stop those mountains from crumbling when the next storm comes.
Some countries (such as Bhutan and Sri Lanka) in South Asia have recently piloted community-based watershed rehabilitation efforts wherein local bodies keep checks on mining activities, which are accompanied by financial payouts for reforestation. If applied here, it has the potential to transform the current humanitarian recovery response into an upfront investment for risk reduction. This could pressurize provincial authorities of KP to enforce stricter measures and to plan for resilience in the long run.
The provincial government sinks into its political warfare with the center, treading on anti-state rhetoric while there are crises within its own borders. As elites trade barbs and chase power across the hall, ordinary people pay the price of floods and deforestation and unregulated mining.
To enhance their competitive advantage, they are placing a growing emphasis on innovation and driving business growth. The findings come as artificial intelligence (AI) is emerging as a crucial technology for banks, and demand for the technology is expected to become fierce.
Strategic priorities have shifted
European banks are shifting strategic priorities from reducing costs to innovation and growth. Investments are focused on scaling AI and cloud capabilities, accelerating digital transformation to enhance customer and employee experiences, and positioning for long-term competitiveness.
AI: From emerging promise to a reality
AI has transitioned from a promising concept to a foundational element in European banking operations. Banks are leveraging AI primarily to enhance fraud detection and elevate customer service, two critical areas given the region’s stringent regulatory environment and the imperative to safeguard financial integrity. Approximately 28% of European banks cite fraud detection and customer service as domains where AI delivers the highest value.
AI-powered chatbots and virtual assistants are streamlining interactions, enabling personalised, real-time customer engagement while optimising operational costs. Yet, the journey is ongoing: nearly half of AI initiatives remain in early stages, hindered by data management challenges and regulatory complexities. This signals a clear mandate for banks to strengthen data architectures and governance frameworks to unlock AI’s full potential.
Banks see the most impact from AI in enhancing productivity, quality, growth, and operational speed. Generative AI alone could add between $200 billion and $340 billion annually to the banking sector through productivity gains. Leading banks are already realising these benefits: ABN Amro uses generative AI to summarise customer calls, boosting contact center efficiency, while JP Morgan has reduced payment validation errors by up to 20% using AI-powered models, cutting fraud and operational costs.
At Infosys, we are witnessing firsthand how AI-driven innovation is transforming software development productivity, with improvements ranging from 7% to 15%. Nearly 18,000 developers have collectively generated nearly 7 million lines of code, supported by AI assistants tailored to their specific roles and functions. This AI-first approach enables us to optimize operations significantly, enhance predictive capabilities to stay ahead of market shifts, accelerate growth trajectories, and strengthen risk management frameworks, including compliance, ensuring our clients remain resilient in an evolving financial landscape.
Data, security, and compliance are what hold banks back
Data privacy and security remain the foremost challenges to AI and cloud adoption. Banks must navigate complex regulatory landscapes while ensuring robust data protection. Interestingly, while over half of European banks consider their data architecture AI-ready, they face the most challenge in implementing AI in their data architecture.
Security concerns also dominate cloud migration decisions. Strong governance, encryption, and compliance frameworks are essential to safely manage sensitive customer data.
Innovation drives customer loyalty
Historically, a bank’s size and reputation anchored customer trust; however, today’s customers prioritise convenience and relevant offerings. The demand for technology talent, particularly in AI and cloud infrastructure, is intensifying. Cybersecurity remains a critical focus, but the rapid growth in AI and cloud roles underscores the sector’s commitment to building robust digital expertise. To meet these demands, banks must harness powerful technology and skilled talent capable of driving ongoing innovation.
Unfortunately, recruiting tech talent — especially in AI — remains a significant hurdle for many banks in the region. The competition for skilled professionals is fierce due to the increasing presence of global banks are vying for the same talent pool.
Many banks are investing heavily in reskilling initiatives to address this talent gap. Governments are doing their part too to bridge the talent gap. For example, the European Commission’s AI Continent Action Plan aims to make Europe a global AI leader by expanding AI education and training. The Commission has launched the AI Skills Academy, which offers specialised education in AI and generative AI, apprenticeship programs, and scholarships to increase diversity and attract talent back to Europe. The plan also promotes European Digital Innovation Hubs to provide accessible AI skills and training services across the EU, supporting worker upskilling and reskilling.
Strategic partnerships: a catalyst for talent development
Banks must consider forming strategic partnerships with educational institutions and technology firms to tackle these challenges effectively. Collaborations can lead to tailored training programs that address specific industry needs. For example, BNP Paribas collaborates with AI startups and invests heavily in AI talent development through its Digital Data and Agile Academy, providing employees with ongoing data and AI skills training. The collaboration by European Social Partners on Employment Aspects of AI will help European banks responsibly navigate AI-driven transformation, safeguarding employee well-being and enabling sustainable adoption of AI.
Additionally, partnerships can facilitate the rapid adoption of new technologies while minimising risks associated with being the first movers in innovation. Lloyds Banking Group has partnered with the University of Cambridge to provide AI training for 300 senior staff as part of its technology transformation, delivering a program called “Leading with AI” that covers AI regulation, ethics, generative AI, and emerging concepts.
Partnerships are critical enablers for institutions to accelerate technology adoption while effectively managing the risks that come with being first movers. At Infosys, we recognize that bringing together diverse perspectives and expertise fosters innovation through meaningful collaboration and idea exchange. With over 270,000 employees who are generative AI-aware across all functions, not just engineering, we cultivate cross-functional teams that leverage varied experiences and insights. This diversity of thought drives richer, more inclusive outcomes that better serve our broad communities and positions us to lead confidently in the evolving AI landscape.
Digital transformation: a path to growth and efficiency
This year is poised to be transformative for European banking. Institutions equipped with effective digital transformation strategies will be able to expand their AI and cloud capabilities. By doing so, they will enhance operational efficiencies and improve customer experiences across all touchpoints to attract and grow their customer base and solidify their competitive edge within the market. While data privacy, security, and regulatory compliance challenges persist, banks that strategically invest in digital capabilities and balance innovation with risk management will emerge stronger and more resilient. Continuous training and collaboration will also remain paramount as banks strive for leadership within the European financial sector.
The Infosys Bank Tech Index is a survey-based research study of nearly 400 global banks that tracks the intricacies of how banks’ priorities across regions differ, where they spend their budgets on technology, and what skills they are looking for.
Jay Nair Executive Vice President and Industry Head for Financial Services in Europe, Middle East, and Africa| Infosys
About The Author
Jay Nair is the Executive Vice President and Industry Head for Financial Services in Europe, Middle East, and Africa. Additionally, he leads the UK Public Service business for Infosys. He is also part of the Supervisory board for Stater.ni (which is largest independent end-to-end service provider for the mortgage market in the Benelux).
He has spent close to three decades in Engineering -both in process control engineering and since 1999, within the BFSI (Banking, Financial Services and Insurance) sector. Jay has extensive experience in Business and Technology Consulting, Practice development, Engineering and Largescale enterprise-wide technology program management. He has led global teams and programs around in the Americas ,Europe ,India, China ,LATAM, and the Asia Pacific.
He has post graduate qualifications in both Software Engineering as well as Business Management.
Gov. Gavin Newsom is proposing to accelerate his administration’s plan to build a $20-billion water tunnel beneath the Sacramento-San Joaquin River Delta by short-cutting permitting for the project and limiting avenues for legal challenges.
Newsom urged the Legislature on Wednesday to adopt his plan to “fast-track” the tunnel, called the Delta Conveyance Project, as part of his revised May budget proposal.
“For too long, attempts to modernize our critical water infrastructure have stalled in endless red tape, burdened with unnecessary delay. We’re done with barriers,” Newsom said. “Our state needs to complete this project as soon as possible, so that we can better store and manage water to prepare for a hotter, drier future. Let’s get this built.”
The tunnel would create a second route to transport water to the state’s pumping facilities on the south side of the Delta, where supplies enter the aqueducts of the State Water Project and are delivered to 27 million people and 750,000 acres of farmland.
Supporters of the plan, including water agencies in Southern California and Silicon Valley, say the state needs to build new infrastructure in the Delta to protect the water supply in the face of climate change and earthquake risks.
Opponents, including agencies in the Delta and environmental advocates, say the project is an expensive boondoggle that would harm the environment and communities, and that the state should pursue other alternatives.
“It’s a top-down push for an unaffordable, unnecessary tunnel that fails to solve the state’s real water challenges,” said Barbara Barrigan-Parrilla, executive director of the group Restore the Delta.
She said the governor “wants to bypass the legal and public processes because the project doesn’t pass the economic or environmental standards Californians expect.”
Newsom, who is set to serve through 2026 and then leave office, is pushing to lay the groundwork for the project.
Newsom said his proposal would: simplify permitting by eliminating certain deadlines from water rights permits; narrow legal review to avoid delays from legal challenges; confirm that the state has authority to issue bonds to pay for the project, which would be repaid by water agencies; and accelerate state efforts to acquire land for construction.
Announcing the proposal, the governor’s office said that “while the project has received some necessary permits, its path forward is burdened by complicated regulatory frameworks and bureaucratic delays.”
The State Water Resources Control Board is currently considering a petition by the Newsom administration to amend water rights permits so that flows could be diverted from new points on the Sacramento River where the intakes of the 45-mile tunnel would be built.
The governor’s latest proposal was praised by water agencies including the Metropolitan Water District of Southern California, which is currently spending about $142 million on the preliminary planning.
MWD General Manager Deven Upadhyay called Newsom’s proposal a “bold step” toward protecting water supplies, saying the approach would support completion of the planning work, reduce “regulatory and legal uncertainties,” and allow the MWD board to make an informed decision about whether to make a long-term investment to help foot the bill for construction.
Jennifer Pierre, general manager of the State Water Contractors, said the governor’s approach makes sense to address costly delays and upgrade essential infrastructure that is “in dire need of modernization.”
Environmental and fishing groups, however, called Newsom’s proposal a reckless attempt to bypass the existing legal process and make it harder for opponents to challenge the project over what they contend would be harmful effects on the Delta region and the environment.
Scott Artis, executive director of the Golden State Salmon Assn., a group that represents fishing communities, called Newsom’s proposal “an attack on the salmon fishing industry and the state’s biggest rivers.”
Commercial salmon fishing has been canceled for three consecutive years because of a decline in the Chinook salmon population. Artis said building the tunnel would represent a “nail in the coffin of California’s once mighty salmon runs.”