Tech firms' entry into financial services creates economic stability risks, BIS's Carstens says

6 December 2018 8:47am
The entry of large technology companies such as Alibaba, Facebook and Samsung into financial services poses a new set of potential financial-stability threats that should be explored by regulators, said Agustin Carstens, head of the global Bank for International Settlements.

Tech giants’ lending and payment services, which typically differ from those of large banks, could create credit and liquidity hazards during a downturn, said Carstens, the general manager of the umbrella group for the world’s central banks.

“Data give big tech firms the edge over competitors,” he said in a speech* in London yesterday. “Such firms may increase market concentration and give rise to new risks, including systemic risks due to the way they interact with the broader financial system.”

Tech companies also may prove susceptible to money laundering, cyber attacks and privacy breaches, he said.