The entry of big technology firms into finance has numerous benefits, the FSB report said, including the potential for greater innovation, diversification and efficiency in the provision of financial services.

Google and Apple both have their respective contactless payment systems, while the latter also launched a credit card earlier this year.

Meanwhile, Facebook is still trying to make its Libra ‘stablecoin’ a reality, with regulators in the US and EU closely scrutinising the proposals.

While the FSB admitted that big tech firms can contribute to financial inclusion – particularly in emerging markets and developing economies – it warned that they present a risk to financial stability as their financial service offerings are expected to grow quickly given their significant resources and widespread access to customer data.

The FSB urges regulators to consider that, left unchecked, a small number of firms may in the future come to dominate, rather than diversify, the provision of financial services in some jurisdictions.

In its report, the FSB called for “vigilant monitoring” of tech firms’ shift into financial services, which it said could crimp the ability of banks to generate capital through retained profits.

Major tech players such as Microsoft, Amazon, eBay, Baidu, Apple, Facebook and Tencent all have massive databases, while some already offer asset management, payments and lending.

Banks in Europe and elsewhere are already required to share customer data with third party fintech companies that want to offer rival payments services. This may need to be the case with tech firms, too, the FSB said.

Elsewhere, it warned about the use of cloud storage solutions and ensuring that the data held by these third-party operators is properly secure, especially considering the implications of cross-border data storage in different facilities which fall under different laws.

“Big Tech firms’ ability to leverage customer data raises the question of whether – and the degree to which – authorities could consider the potential to promote the mobility of data between the various actors that are involved in the provision of financial services,” the FSB said.

“Doing so may help encourage competition and help ensure a level playing field amongst market participants.”

The entry of big technology firms into finance has numerous benefits, the FSB report said, including the potential for greater innovation, diversification and efficiency in the provision of financial services.

Google and Apple both have their respective contactless payment systems, while the latter also launched a credit card earlier this year.

Meanwhile, Facebook is still trying to make its Libra ‘stablecoin’ a reality, with regulators in the US and EU closely scrutinising the proposals.

While the FSB admitted that big tech firms can contribute to financial inclusion – particularly in emerging markets and developing economies – it warned that they present a risk to financial stability as their financial service offerings are expected to grow quickly given their significant resources and widespread access to customer data.

The FSB urges regulators to consider that, left unchecked, a small number of firms may in the future come to dominate, rather than diversify, the provision of financial services in some jurisdictions.

In its report, the FSB called for “vigilant monitoring” of tech firms’ shift into financial services, which it said could crimp the ability of banks to generate capital through retained profits.

Major tech players such as Microsoft, Amazon, eBay, Baidu, Apple, Facebook and Tencent all have massive databases, while some already offer asset management, payments and lending.

Banks in Europe and elsewhere are already required to share customer data with third party fintech companies that want to offer rival payments services. This may need to be the case with tech firms, too, the FSB said.

Elsewhere, it warned about the use of cloud storage solutions and ensuring that the data held by these third-party operators is properly secure, especially considering the implications of cross-border data storage in different facilities which fall under different laws.

“Big Tech firms’ ability to leverage customer data raises the question of whether – and the degree to which – authorities could consider the potential to promote the mobility of data between the various actors that are involved in the provision of financial services,” the FSB said.

“Doing so may help encourage competition and help ensure a level playing field amongst market participants.”