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Big Tech move into finance to come under closer EU scrutiny

Published 01/02/2024, 15:25
Updated 01/02/2024, 15:34
© Reuters. A 3D printed Facebook's new rebrand logo Meta is seen in front of displayed Google logo in this illustration taken on November 2, 2021. REUTERS/Dado Ruvic/Illustration

By Huw Jones

LONDON (Reuters) - Tracking how Big Tech is moving into the European Union's financial services sector is challenging, but it currently does not pose a threat to financial stability, the bloc's financial watchdogs said on Thursday.

The EU's banking, insurance and securities regulators jointly "mapped out" the presence of Big Tech moves into financial services, which have raised concerns given their reach, troves of data, and deep pockets.

The stocktake looked at Google owner Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Meta, Alibaba (NYSE:BABA), Tencent (HK:0700), Rakuten, Orange, Vodafone (LON:VOD), Tesla, and Apple (NASDAQ:AAPL).

"The results of the stocktake show an increasing presence, albeit still at a low base, of Big Tech subsidiaries as direct providers of financial services in Europe, notably in the areas of payments and e-money," the watchdogs said.

"Big Techs directly providing insurance services have been reported as well."

The watchdogs said there was poor visibility over activities within Big Tech, unreliable notification of cross-border activities to regulators, and challenges in monitoring how they offer financial services.

There is no urgent need for regulatory changes in relation to Big Tech's direct financial services provision, they said.

© Reuters. A 3D printed Facebook's new rebrand logo Meta is seen in front of displayed Google logo in this illustration taken on November 2, 2021. REUTERS/Dado Ruvic/Illustration

"However, they reiterated the potential risks from any potential further increase in these activities," the watchdogs said in a statement.

They said they will continue to strengthen the monitoring of the relevance of Big Tech in the EU financial services sector by using a new monitoring "matrix".

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