Costa, who is also the head of the Bank of Portugal, told a conference in Lisbon that financial supervisors such as central banks also need to adopt new tools to deal with "the new reality" of fast-changing financial technology and companies like Facebook or Google moving into finance.
"Although the 'Big Tech' is currently limited to Asia-Pacific and North America, we must not forget that they have a global vocation and that their expansion into the European market is a matter of time," Costa said.
"The banking business model as we know it will inevitably undergo profound changes," he added, pointing to comparative advantages of tech firms over banks in using big data and artificial intelligence for credit analysis and risk assessment.
Last December, Alphabet Inc Google and digital banking app Revolut obtained banking licences in Lithuania, which is part of the European Union and the euro zone.
"There will be an adjustment on the banks' side. Banks will have to be flexible and quick in anticipating client needs and the evolution of the market so as not to lose the direct relationship they have built with their customers," Costa said.
(Reporting by Sergio Goncalves; Editing by Andrei Khalip/Mark Heinrich)