Spanish banks have warned of the potential financial stability implications of Big Tech firms like Goolge, Amazon and Facebook entering the financial services industry.Red flags around the future roles of Big Tech firms in financial services were raised at an event organised by the University of Financial Studies (Cunef) in Madrid and the Spanish Banking Association.
Regulatory issues topped the agenda, with access to financial data expected to play a key role in the coming battle between Big Tech firms and banks. The introduction of PSD2 and the move to Open Banking is expected to upset the competitive advantage enjoyed by banks, with Big Tech firms ready to benefit from asymmetric regulation and extend their appeal to consumers.
Lead economist for digital regulation and trends at BBVA Research, Álvaro Martín Enríquez, stressed that policy makers need to take into account “the possible financial stability problems that could result from the big techs joining the banking sector”.
Turning to regulation, he maintained that: “There can be no artificial barriers to preserve the ‘incumbents’ position, but there also shouldn’t be any impediments to the sector’s transformation”.
In this regard, he suggested “re-balancing the regulatory framework to avoid advantageous positions for some actors” – referring not just to Big Tech, but also to telecoms, for example, which will be able to access bank customers’ data thanks to PSD2, but not the other way around.
Similarly, senior manager of public policy at Santander, Gloria Hervás, believes that: “We need a regulatory framework that encourages competition and innovation, and is sustainable over the long-term.” Regarding regulations like PSD2, she feels that it’s important to explore the possibility of data from companies in other sectors also being shared with third parties, “always with their consent”.