Tech titans could end up dominating the FinTech space if left unchecked, a new report from the Financial Stability Board (FSB) warns.
Facebook, Alibaba, Apple, Amazon and Uber are just some of the big tech firms that have added a financial element to their offerings over the past decade.
Now, the international body has issued a new report about big tech firm’s entry into the scene, warning that it could pose risks to financial stability.
One of the biggest concerns was that big tech firms could leverage their vast resources and access to customer data to squeeze out competitors, meaning they could end up dominating the market.
The FSB stated that policymakers must to carefully consider the best laws and regulations to put in place to ensure the health of the market.
Although, the FSB also noted that big tech firms providing financial services could also have several benefits. Among others, it believed that, if handled correctly, it could lead to more innovation, diversification and improved efficiencies in the financial services sector.
It could also contribute to more financial inclusion, particularly in emerging markets and developing economies.
That latest point was something Mark Zuckerberg, Facebook’s CEO, argued for when he testified in front of the United States House of Representatives Committee on Financial Services in October to calm down lawmakers’ concerns about Libra, the cryptocurrency project Facebook is spearheading as part of the Libra Association.
The risks expressed in the report echoes those expressed by the market stakeholders and experts FinTech Global recently spoke to regarding what the impact big tech firms’ entry into the market would have for the sector.
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