Banking regulators worldwide believe that entry of big tech companies like Google, Amazon and Apple into the financial services sector creates multiple threats to the market stability, which might require new legislation for securing equal conditions for small fintech companies and banks.

Plusworld.ru writes that according to the Financial Stability Board (FSB) report, presence of large technological companies in the financial sector creates opportunities for broader introduction of innovation, as well as diversification, and increase of efficiency in provision of financial services.

“However, the Big Tech can also threaten financial stability,” FSB said.

The regulators are concerned most of all by the tech giants’ strong ability for scaling, which eventually leads to domination in the market, given their significant resources and extensive access to client data.

FSB cautiously assumes that the rules, previously adopted for Open Banking, might have to be changed for the Big Tech. These rules oblige providers of financial services to exchange client data with third-party suppliers in order to secure equal conditions for banks and small fintech startups.


“Big Tech’s ability to use client data to its benefit prompts to ask if the regulators might consider that potential to encourage data exchange between the players in the financial services market. It might facilitate development of competition and secure equal conditions for all players,” FSB said in the report.

FSB also believes that regulating and monitoring bodies should also keep in mind the stability and viability of the business models of existing companies.

Third-party cloud services create a range of operational, administrative and monitoring factors, which FSB believes should be taken into account as well, especially in the cross-border context of potential concentration in the United States of Big Tech companies like Amazon, Google and Microsoft.

“Despite seeming absence of direct threats to financial stability, related to use of cloud services by financial institutions, FSB remains alert, which demonstrates the appropriateness of further assessment of regulatory standards for data exchange and operational interaction between providers of cloud services,” writes Plusworld.ru.

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