Global financial regulators aim at Big Tech’s data dominance and shift to financial services

Big Tech companies like Google and Alibaba could be compelled to share with banks and financial technology firms data related to financial services customers. This cam after the Financial Stability Board (FSB) called for “vigilant monitoring” of Big Tech’s shift to financial services.

The FSB released a report on the matter on Sunday. The measure was a call to even up competition between big techs and banks, which in Big Tech’s shift to financial services could be crippled in generating capital through retained profits.  

As Facebook’s stablecoin Libra faces global criticism, regulators from around the world said that Big Tech’s growing hold of other sectors such as financial services pose questions of data privacy, competition, and financial stability.  

Despite being in the beginning stages of development in most countries, Big Tech companies such as Alibaba in China has contributed to reaching underserved communities with financial services, the FSB said in the report.

The FSB, chaired by Federal Reserve Governor Randal Quarles, stated that Apple, Microsoft, Facebook, Amazon, Baidu, Tencent, and eBay have massive databases. Some of these offer payments, lending, and asset management.

Big Tech firms like Google, Facebook, Amazon, eBay, and Alipay have already acquired payments-related licenses in Lithuania and Luxemborg, Ireland, although most of these big tech firms haven’t built up large volumes. Ireland and Lithuania are members of the European Union.

European banks and a few non-European ones have begun mandatorily sharing customer data with third party “fintech” companies offering rival payment services. The FSB said that this might be the case with Big Tech firms as well.

“Big Tech firms’ ability to leverage customer data raises the question of whether – and the degree to which – authorities could consider the potential to promote the mobility of data between the various actors that are involved in the provision of financial services,” the FSB said.

“Doing so may help encourage competition and help ensure a level playing field amongst market participants.”