The UK’s financial watchdog, the Financial Conduct Authority (FCA), is set to scrutinise big tech firms and their data sharing practices. Nikhil Rathi, the FCA’s chief executive, revealed plans to investigate how these companies’ access to vast amounts of data could lead to improved financial products and more consumer choice.
Speaking at an event hosted by the Digital Regulation Cooperation Forum (DRCF) a coalition of several major UK regulators, Mr Rathi expressed the FCA’s interest in understanding how data collected by tech firms could benefit consumers and finance companies. If the FCA’s analysis determines that tech firms’ data could be beneficial in the financial services sector, it would aim to encourage more data sharing between tech and financial companies through systems like Open Banking, according to Mr Rathi.
The FCA boss also stated that if any potential risks or harms were identified from the non-sharing of data, the authority would collaborate with the Competition and Markets Authority (CMA) to develop proposals around digital and data conduct to enhance data sharing where feasible.
“Big Tech’s growing emergence in financial services has already made life easier for consumers, but it is still unclear how valuable their data will become in financial markets. That’s why we want to work with Big Tech to examine how their data could be most helpful for financial firms and their customers in future, and to ensure competition evolves effectively.” He stressed the necessity to stop a few tech giants from solidifying their dominance in the industry, a challenge that global regulators are tackling across various sectors.
“With Big Tech now an essential component of the financial services supply chain, there is also the risk that the combination of cloud, data and AI will cement Big Tech’s power in partnerships with firms across financial services and other sectors,” Mr Rathi remarked. “We need more industry players to feel they have a part to play on the data pitch. Safe data sharing can benefit firms, markets and consumers. It is crucial for Open Banking and Open Finance.”
