Context
The FCA has published a Call for Input in relation to the potential competition impacts of the data asymmetry that exists between ‘Big Tech’ (e.g., Amazon, Google, Microsoft etc) and firms in the financial services sector. The FCA is looking to gather focused information and evidence on whether this data asymmetry could lead to Big Tech firms gaining entrenched market power in financial services. The FCA also wants to better understand the potential benefits that could arise from greater use of Big Tech firms’ customer data in financial services, and is asking for evidence on other significant factors that have evolved since it published its Feedback Statement (FS23/4).
Key points to note
- Financial services firms typically have access to data related to individuals and their finances, which has traditionally been used to provide financial products and services to consumers.
- the increase digitalisation of financial services, accelerated after the Covid-19 pandemic, has empowered data and technology to drive changes in financial services markets, producing new products and ways for firms to engage with their customers.
- Big Tech firms have access to a variety of customer data collected or stored on their platforms which, when used (including when they are combined with new sources of financial data facilitated by data sharing policy initiatives) may place incumbent financial services firms and other new entrants at a significant competitive disadvantage that potentially reduces competitive pressure in the longer term to the detriment of consumers.
- The FCA is keen to understand the positive benefits that the use of ‘Big Data’ may bring.
- A full copy of the questions the FCA are looking for input on can be found in Annex 1 of the Call for Input.
Next actions
Please send any feedback by 22 January 2024, by e-mail to BigTechCFI@fca.org.uk. The FCA is also inviting firms to e-mail if they’d like to discuss this work before sending your submission. The FCA intends to report back on the CFI in Q2 2024, when it will set out its analysis of the evidence it receives and any subsequent action it may take.