BIS: Regulatory Rethink Needed for Big Techs Breaking Into the Financial Sectorby Fintech News Singapore February 9, 2023
There is a rising need for a regulatory rethink on the impact that big techs have on the financial services sector, according to the General Manager, Bank for International Settlements (BIS) Agustín Carstens at a conference in Basel, Switzerland.
Big techs such as Alibaba, Tencent, Amazon, Apple and more have extended their reach across a wide range of industries, with their existing core businesses being grounded in e-commerce and social media among others.
These bigtechs are able to scale rapidly in the finance sector using the user data from their other existing businesses.
However, their rapid growth could result in a situation where there is an “emergence of dominant firms with excessive concentration of market power” or have the potential to quickly become “too big to fail”.
In his speech, Carstens said that as these big techs continue to push into financial services, it is increasingly evident that the current regulatory approach is not fully fit for purpose to address related policy challenges.
The “Big techs in finance – implications for public policy” conference is set to explore several approaches that could serve as a basis for a new regulatory framework for big techs in finance.
“Without a doubt, a regulatory re-think is warranted, and we need a new path to follow.
One that considers the key role of data in big techs’ DNA-based business model. One that strikes the right balance between benefits and risks.”