The chief executive of the Financial Conduct Authority (FCA), Nikhil Rathi, has announced plans to assess the impact of big tech firms on financial services.
Rathi highlighted their access to vast data and its potential to benefit consumers and businesses with better products and prices.
“The growing emergence of Big Tech in financial services has already made life easier for consumers, but it is still unclear how valuable their data will become in financial markets,” said Rathi in a speech on Monday.
“We want to work with big tech to examine how their data could be most helpful for financial firms and their customers in the future, and to ensure competition evolves effectively,” he said.
Speaking at a Digital Regulation Cooperation Forum (DRCF) event, Rathi also discussed the FCA’s response to the government’s white paper on artificial intelligence (AI), released the same day.
The FCA aims to analyse data sharing between big tech and financial firms, given that while big tech can access financial data through Open Banking, they are not obligated to share their data in return.
Rathi emphasised collaboration with big tech to explore how their data could best serve financial firms and customers, ensuring effective competition.
“If the FCA’s analysis finds big tech data is valuable in financial services, it will look to incentivise more data sharing between big tech and financial firms through its open banking and broader open finance work. If it finds potential risk or harms from non-sharing of data it will also look to develop proposals for the Competition and Markets Authority (CMA) to consider when they are given powers to regulate designated firms’ digital and data conduct, expected via the Digital Markets, Competition and Consumers (DMCC) Bill,” Rathi said.
“If the FCA finds value in big tech data for financial services, it will encourage more data sharing through initiatives like Open Banking. Conversely, if risks arise from non-sharing, the FCA will propose regulatory measures through the Competition and Markets Authority (CMA),” he said.
The DRCF has also launched the AI and Digital Hub, a collaboration between regulators that enables innovators to get advice on issues that cross more than one DRCF regulator’s remit.
