RBI warns against allowing Big Tech firms into financial services
Entry of the so-called Big Tech companies in financial services in emerging markets such as India could present challenges to regulators towards maintaining adequate stability and governance of the ecosystem, the Reserve Bank of India said. The central bank flagged monopolistic practices, antitrust issues, cybersecurity risks, and challenges around data privacy as key concerns that could emerge. “Big Techs offer a wide range of digital financial services…of several digital financial services…of several advanced and emerging market economies,” RBI said in its biannual Financial Stability Report. “While this holds the promise of supporting financial inclusion and generating lasting efficiency gains… concerns have intensified around a level-playing field with banks, operational risk, too-big-to-fail issues, challenges for antitrust rules, cyber security and data privacy.” Big Tech is a term used for the five most dominant information technology firms in the world —Google, Amazon, Facebook, Apple and Microsoft—that have market capitalisation ranging between $1 trillion and $2 trillion, each. The RBI statement comes at a time when the Indian government has been embroiled in a tussle with Big Tech firms, most notably microblogging app Twitter, on implementation of its newly issued Intermediary Guidelines and Digital Media Rules.