Data-rich Big Tech companies such as Alibaba and Amazon have been involved for some time in financial services such as banking, payments, asset management and insurance, with some also providing cloud computing to run key services for banks.
A rethink is needed on how to directly regulate activities of Big Tech companies in financial services, given their size and influence, a top official at an international forum for central banks said in Wednesday.
Their size and reach in social media and e-commerce means they can quickly build up market share in financial activities, Bank for International Settlements General Manager Agustin Carstens said in a speech.
This creates a risk of them becoming "too big to fail" - a problem regulators hoped they had solved with banks after bailouts in the financial crisis over a decade ago.
"Without a doubt, a regulatory rethink is warranted, and we need a new path to follow," Carstens said, adding a new "holistic" framework was needed that included requiring Big Tech financial services to be ring-fenced from other operations....
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