The Bank for International Settlements (BIS) has suggested global financial regulators to strengthen supervision of the largest technology companies (the Big Tech) in order to contain their growing market power and eliminate possible data confidentiality-related problems and threats to financial stability, Bloomchain.ru writes.

BIS General Manager Agustin Carstens and three of his colleagues have stated that the current system is “unlikely to provide an adequate response” to the emergence of Big Tech in the financial industry.

“Current structure does not take into account the potential (possibly global) systemic impact of Big Tech on the financial sector and potential side effects,” they said. Currently applicable licensing requirements for payment firms “have been formulated for small money transfer service providers.”

The statement highlights the growth of Google and Facebook users and the fact that Alibaba Group and Tencent hold more than 90% of the market share of mobile payments in China. According to BIS executives, the emergence of tech companies in financial services is driven by the speed of new product introductions, a large user base, and network impact.

BIS believes more attention should be paid to the growing concern among central bankers and financial authorities about new technologies that go beyond the traditional banking system.

BIS representatives have stated that clearer rules are needed for tech companies, similar to what the EU, China and the USA have introduced. The legislative changes they have made include provisions that prevent data concentration and unfair competition practices by large technological companies.

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