Featured Product

    FSB Examines Financial Stability Implications of Bigtech in Finance

    October 12, 2020

    FSB published a report that examines the market developments and financial stability implications with respect to provision of financial services by bigtech firms in emerging market and developing economies or EMDEs. The report finds that expansion of bigtech firms into financial services in emerging market and developing economies has generally been more rapid and broad-based than that in advanced economies. The range of financial services provided by bigtech firms in emerging market and developing economies is also wider than in advanced economies. The report is being delivered to the G20 Finance Ministers and Central Bank Governors for their virtual meeting on October 14, 2020.

    The report focuses on the provision of financial services by bigtech firms in emerging market and developing economies and how the nature and scale of such activities differs from those in advanced economies. It then describes the drivers of demand for—and the supply of—financial services provided by bigtech firms in emerging market and developing economies, including the benefits and risks they pose to financial stability. Finally, the report discusses the challenges to regulating such activities and explains that the entry of bigtech firms into financial services could have a number of implications for official-sector policy in emerging market and developing economies. The report highlights that implications for policy may differ depending on bigtech firms’ mode of interaction with incumbent institutions.

    Where bigtech firms partner with incumbents, policymakers should be mindful of the new interlinkages this might create with existing financial institutions. Regulators and supervisors might also wish to ensure that parties to such arrangements put in place clear delineations of responsibility and liability between financial institutions and bigtech firms as well as assess potential concentration and operational risks. Financial sector regulators and supervisors could continue to monitor the nature of the commercial response by incumbent financial institutions’ and the implications for their risk profile, viability, and resilience. Where financial services activities are undertaken by new types of actors, such as bigtech firms, the principle of "same risk-same regulation" should apply. It may also be necessary to update regulatory frameworks to ensure all activities are subject to appropriate regulation and supervision and take into account new barriers to competition that might be introduced. Some financial authorities in emerging market and developing economies have also taken steps to tailor their regulatory approach to the relative size of bigtech firms’ activities in financial services. Regulatory frameworks should also remain flexible to adapt to changing business models and activities. In addition to these general considerations, the policy areas that could present additional risks to financial stability in the context of emerging market and developing economies are data governance, operational risk management, and consumer protection.

     

    Related Links

    Keywords: International, Banking, Insurance, Securities, Bigtech, Emerging Markets, Operational Risk, G20, Developing Economies, Data Governance, Regtech, FSB

    Related Articles
    News

    BIS Bulletin Examines Cognitive Limits of Large Language Models

    The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.

    January 25, 2024 WebPage Regulatory News
    News

    ECB is Conducting First Cyber Risk Stress Test for Banks

    As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.

    January 24, 2024 WebPage Regulatory News
    News

    EBA Continues Momentum Toward Strengthening Prudential Rules for Banks

    A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.

    January 24, 2024 WebPage Regulatory News
    News

    EU and UK Agencies Issue Updates on Final Basel III Rules

    The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards

    December 19, 2023 WebPage Regulatory News
    News

    Industry Agency Expects Considerable Uptake for Swiss Climate Scores

    The Swiss Federal Council recently decided to further develop the Swiss Climate Scores, which it had first launched in June 2022.

    December 18, 2023 WebPage Regulatory News
    News

    BCBS Consults on Disclosure of Climate Risks, Issues Other Updates

    The Basel Committee on Banking Supervision (BCBS) launched consultation on a Pillar 3 disclosure framework for climate-related financial risks, with the comment period ending on February 29, 2024.

    December 18, 2023 WebPage Regulatory News
    News

    US Government Moves to Regulate Development and Use of AI Models

    The U.S. President Joe Biden signed an Executive Order, dated October 30, 2023, to ensure safe, secure, and trustworthy development and use of artificial intelligence (AI).

    December 18, 2023 WebPage Regulatory News
    News

    MAS Launches Gprnt Digital Platform for ESG Reporting for SMEs

    The Monetary Authority of Singapore (MAS) launched an integrated digital platform, Gprnt, also known as “Greenprint.”

    November 29, 2023 WebPage Regulatory News
    News

    EBA Finalizes Templates for One-Off Climate Risk Scenario Analysis

    The European Banking Authority (EBA) has published the final templates, and the associated guidance, for collecting climate-related data for the one-off Fit-for-55 climate risk scenario analysis.

    November 28, 2023 WebPage Regulatory News
    News

    NGFS Publishes Phase IV Long-term Climate Scenarios for Banks

    The Network for Greening the Financial System (NGFS) published its latest set of long-term climate macro-financial scenarios (Phase IV) for assessing forward-looking climate risks.

    November 28, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8947