Big tech in finance: opportunities and risks

Speech by Mr Hyun Song Shin, Economic Adviser and Head of Research of the BIS, on the occasion of the Bank's Annual General Meeting, Basel, 30 June 2019.

Large technology companies ("big techs") have begun to enter financial services. Their entry builds on their established digital platforms in e-commerce, search and social media, and holds the prospect of efficiency gains and greater financial inclusion. At the same time, it introduces new elements into the risk-benefit equation. Some are old issues of financial stability and consumer protection in new settings, which can be addressed by adapting or expanding existing regulation. But big techs also introduce elements that go beyond traditional financial regulation. The very features that bring the benefits also have potential costs associated with market power and data privacy. Public policy towards big techs in finance needs to build on a more comprehensive approach that draws on financial regulation, competition policy and data privacy regulation. This chapter outlines a "regulatory compass" to help navigate the new, uncharted waters.