Big Tech Companies are in Trouble
Big Tech companies like Google, Alibaba, and other firms might be forced to give up data on their financial services clients, with financial technology companies and financial entities. This is because financial regulators want to avoid any unfair advantage in the financial markets competition.
Facebook has been facing much criticism due to the stable-coin, Libra. Financial regulators all around the world, with global authority, stated that the Big Tech companies are unsteadily expanding and this has led to many inquiries that revolve around financial solidity, competition, and information privacy.
According to a report by the Financial Stability Board, or the FSB, there needs to be thorough and comprehensive monitoring of the Big Tech companies that are leaning towards the financial services industry. This could lead to banks losing revenue and the ability to generate profits, since all clients and consumers will move towards the Big Tech companies.
It is not considered a fully functioning service in most countries, but Big Tech firms in countries like China has managed to distribute the option of financial services to communities in the country. This statement was claimed by the Federal Reserve Governor Randal Quarles, in a financial report on Sunday.
Who are the Companies?
The Financial Stability Board states that the players of the Big Tech Companies include conglomerates like: Amazon, Apple, Tencent, eBay, Microsoft, and Facebook. These companies all have large databases with all client information, while also providing management of investments, payments, and the ability to borrow from them.
Most Big Tech companies have obtained online payment licenses and registered in the European Union, specifically the ESMA. However, they have yet to do anything about it. These companies include: Google, eBay, Amazon, and Facebook.
Financial entities in Europe and other regions are already obliged to share the data they have on customers, with financial technology firms of a third party that would like to provide competitive payment services. This needs to be the case with the Big Tech companies, as well, according to the FSB.
“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 factors that are involved in the provision of financial services,” the FSB stated.
“Doing so may help encourage competition and help ensure a level playing field among market participants.”