The FCA is seeking views on the potential competition benefits and harms from Big Tech firms’ entry into a range of retail financial services sectors.
Big Tech firms’ presence in UK
financial services markets has been steadily increasing, with the
potential to expand further and change markets quickly.
Sheldon Mills, Executive Director of Consumers and Competition, said:
"In recent years, Big Tech’s entry into financial services, in the UK
and elsewhere, has demonstrated their potential to disrupt established
markets, drive innovation and reduce costs for consumers. Across the
world, we’ve seen the capability of Big Tech to offer transformative new
products in areas such as payments, deposits and consumer credit.
"We want to make sure that these
benefits are fully realised while, at the same time, ensuring good
consumer and market outcomes. This is vital when we consider the role of
Big Tech firms in the provision of key technological infrastructure
like cloud services.
"The discussion we are starting
today will inform the FCA’s pro-competitive approach to digital markets,
and I encourage consumers, firms and fellow regulators to join the
conversation."
To begin the discussion, the FCA
has published analysis focusing on the potential competition impacts of
Big Tech’s entry in four vital retail sectors: payments, deposit taking,
consumer credit and insurance.
By combining financial services
with their existing business, Big Tech firms can bring benefits to
consumers. These might be innovative new offers with highly competitive
pricing driven by increased efficiency, delivering healthy competition
with incumbent financial services providers.
But in the longer term, Big Tech
firms could pose competition risks if they rapidly gain market share,
and they are able to exploit market power.
No regulatory changes are being
proposed at this stage, and the FCA’s paper aims to stimulate discussion
to inform its regulatory approach to Big Tech firms as part of the new
UK pro-competitive regime for digital markets.
The FCA has a long-established
reputation for supporting innovation and competition across financial
markets and it is committed to delivering fair value for consumers in
digital markets, as outlined in its latest Business Plan.
Notes to editors
- The Discussion Paper is available to read here.
- The FCA is inviting responses by 15 January 2023 and will be hosting
an expert panel event on 28 November, followed by sector specific
workshops on 6 and 7 December. Register here.
FCA
© FCA - Financial Conduct Authority
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