The enormous risks of Big Tech's banking push — and how regulation could make them worse
The global banking regulator is monitoring Big Tech's push into the financial system, but it warns against measures that might stifle innovation and cheaper finance.
Globally, the tech and platform giants like AliPay, Google, Amazon and Tencent are getting deeper into financial services. For incumbent banks, their scale, customer engagement and financial resources pose a huge threat.
Regulators have a different concern: were these tech platforms to become systemically significant in the financial system, the “too-big-to-fail” implications are enormous.
But does Big Tech actually bring anything to the table that offsets that risk? They offer everything — payments, lending, deposits — but do they actually add to competition?
The international banking regulator, the Bank for International Settlements (BIS), has now done some particular research on that question, ultimately to inform the question of whether the benefits to consumers and economic efficiency outweigh the risks.
