Big Tech's interest in financial services is once again coming under the microscope, with both a top Federal Reserve staffer and senior European bankers voicing concerns that the likes of Amazon could be stepping onto their turf without proper oversight.
Fed Vice Chairman Randal Quarles is monitoring how tech firms could provide things like payments and lending services outside of regulatory oversight, according to Bloomberg, citing sources.
With Amazon widely expected to offer a checking account-like product, and the likes of Google and Facebook increasingly entering the payments sphere, Quarles is looking into the issue, although his interest is still described as preliminary.
Meanwhile, some of the top bankers in Europe have been calling on EU rulemakers to take a stand on tech firms offering finacial services, particularly in the open banking era, where banks are being forced to open up their data to third parties but without any reciprocity.
Speaking at an event in Brussels, quoted by the Financial Times, BNP Paribas chairman Jean Lemierre said: "When a third party gets involved in the payments system, it is hard not to see a deposit-taking activity and we have done a lot of work to protect depositors in the past.
"The magic word here is ‘wallet’. For me ‘wallet’ is close to deposit, so [regulators] they have to take a view on this."
Banco Santander executive chairman Ana Botin echoed this sentiment, calling for a single legal framework on data, insisting that while she is happy to compete with the big tech firms, it has to be "on the same terms — they are all taking deposits and making payments".
However, regulators appear reluctant to act on the concerns: "We are reluctant to come up with any kind of regulation for fear of stifling innovation,” said Bill Coen, secretary-general of the Basel Committee on Banking Supervision.