There are two approaches to fintech sector: the Chinese and the other, which everybody else uses, PwC US Global Financial Services Leader John Garvey said in an exclusive interview to the online edition of Bankovskoye Obozreniye (“The Bank Review) magazine.

When asked if Google could become a bank and a large global financial firm could transform into an IT company in the near future, Garvey said:

“China allowed fintech companies to compete with banking organizations, which is why certain large Chinese enterprises can actively work in the financial services sector without significant regulation. Furthermore, China does not regulate the use of personal information that can be harvested from social networks. These conditions create the possibility to offer credit services. As a result, you get fintech companies that are great at lending services as they have the data for scoring. Nothing holds them back from opening their own financial funds. It is an exclusively Chinese approach, but even China still has banks.


Can large IT companies become banks? It has been a topic of multiple discussions held in varying scale and at different levels of seniority. Personally, I have talked about this with top managers of tech giants. Many private investment funds would also like to do banking business or enter into the sector of financial services, and vice versa, bankers are considering the opportunities of going beyond the framework of their main activity. However, at every attempt they are stopped by the issue of regulation. IT giants are not keen to turn into companies regulated by banking legislation, which is why none of them will transform into a bank completely until the regulation changes.

The organizations that describe themselves as digital banks or online insurance companies are a much larger threat for classic banks. These enterprises already operate in the U.S. successfully and conduct more payments than large American banking organizations. Russia has several examples of it too, and South Africa has insurance and financial companies that are real, serious competitors for the regular banks,” said John Garvey.

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