Will Amazon and Google change the fintech game? Global regulators think so
A new report says markets could change quickly if large technology companies offer more fintech products.
A report from the Financial Stability Board (FSB), an international body that monitors the global financial system and financial stability, has found that the entry of large technology companies such as Amazon, Apple and Google into financial services could have a rapid and decided impact on financial stability.
FSB’s report said that fintech products and services are enjoying high adoption rates in particular markets. However, it says fintech firms have typically found new niches such as peer-to-peer lending, offered products to underserved sections of the market or partnered with incumbent institutions to get access to clients.
According to FSB, “while the financial stability implications of fintech have generally been judged to be small because of their relatively small size, this could change quickly with deeper involvement of the large technology providers”.
Large technology companies such as Amazon and Google have already entered financial services and begun offering products. In Australia, Google Pay, Apple Pay and Samsung Pay are examples as well as PayPal’s working capital loan for businesses. In China, Alibaba and Tencent have both entered mobile payments, lending and insurance markets.
“BigTech firms can partner with incumbents and act as distributors of their payment, lending and insurance products (which is being significantly simplified through APIs),” said the FSB report. “Alternatively, their access to a large quantity of client data could allow them to carry out risk assessments, which could underpin the provision of credit.”
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