The Role of Big Techs in Finance - Opportunities & Risks, an upcoming European Response?

Dear readers,

Pick one,

How is the European Commission addressing Big Techs in finance? This week, we explore key digital finance regulation, delve into associated risks, and examine the impact of GAFAM on the EU and non-EU traditional financial landscape. As you may already know, regulators are increasingly focused on the topic, and there is no joker for it – the recent report from the French regulator ACPR is yet another testimony to this growing attention.

Big Techs slightly diverge from fintechs, which operate on a smaller scale. Fintechs provide financial services relying on their digital business model. Whereas Big Techs are different animals, finance being one of their activities and have a completely different scale, encompassing major players managing large e-commerce platforms, social media or distributing software.

I am sure you know who we are talking about. Various factors have paved the way for Big Five's expansion, with COVID-19 boosting revenues and evolving strategies. Leveraging their data processing capabilities allows these companies to quickly scale new business lines, and finance is another sector where Big Techs are starting to tap into.

Big Techs in the financial sector: Where Do We Stand?

The question is legitimate, because it is not always obvious when you work in finance. You may ask yourself, are GAFAM really entering the financial sector? I can assure you, they are.