LONDON: A push by big technology firms into financial services in developing countries will improve access to them, but might also make traditional lenders more vulnerable, the Financial Stability Board (FSB) said.
The expansion in emerging markets has generally been more rapid and broad-based than that in advanced economies, the FSB, which coordinates financial regulation for the Group of 20 Economies (G20), said in the report released on Monday.
Lower levels of access to traditional banking and financial services developing economies had created demand for services now offered by big tech firms, the report found, particularly among low-income populations and in rural areas.
An increasing availability of mobile phones and internet access supported this trend, the FSB said.
“However the expansion of BigTech activity also gives rise to risks and vulnerabilities,” it said, pointing to lower financial literacy and firms using other data gathered.
“Competition from BigTech firms may, in places, also reduce the profitability and resilience of incumbent financial institutions and lead to greater risk-taking,” the FSB added. ($1 = $1.0000)
Another report said:
European Union regulators are making a ‘hit list’ of up to 20 large internet companies, potentially including Facebook, Apple, Amazon and Alphabet’s Google, that will be facing new and tougher rules aimed at curbing their market power, the Financial Times reported https://on.ft.com/34NZ3lW.
The big technology platforms will have to comply with tougher regulation than smaller competitors, the newspaper reported on Sunday, citing people familiar with the discussions.
New rules will force the companies to share data with rivals and be more transparent on how they gather information, the report said.
The list will be made based on parameters like market share and number of users, the newspaper said, adding that the exact number of companies and the precise criteria for the list was still being discussed. – Reuters