The Financial Stability Board, an international organisation that monitors and analyses the global financial system and reports to the G20, has warned that BigTech companies are potentially a bigger threat to banks than fintech startups. Tech corporations such as Alibaba, Amazon, Tencent, Facebook, Apple, and Microsoft have ample cash, brand recognition, and a huge customer base that enables them to scale up quickly and offer personalised financial products. And while this could lead to more efficient and affordable services, there are serious downsides, too.
Banks could become more risk-tolerant in their operations to increase their falling profitability. This could possibly destabilise the global market, and regulators need to closely monitor these developments to be able to act preemptively and stabilise the finance sector.