Tech Giants in Banking: The Implications of a New Market Power

The gradual penetration of Tech giants into banking and financial services is having a wide-ranging impact on the industry. Large technological and non-financial companies can take advantage of a privileged relationship with consumers, previously developed in the course of their commercial and industrial activities and exploit advanced technical solutions – such as data collection – in order to provide financial services. New competitors for established financial intermediaries should, in principle, be welcomed as they foster competition and innovation in a slow-moving industry. However, risks may arise from cross-sectoral consolidation between the tech and banking industries. Furthermore, the phenomenon of Tech giants in banking has implications that extend well beyond the banking system and that affect fiscal systems and the orderly functioning of markets. Regulators face the task of developing new frameworks to address this challenge.

Paper prepared in the framework of the IAI-Intesa Sanpaolo Partnership, June 2019. Presented in Milan on 6 June 2019 in the event entitld "The rise of tech giants. A game-changer in global finance and politics".