Context
The FCA has published a speech by Nikhil Rathi, announcing the regulator’s plans to examine how Big Tech firms’ unique access to large sets of data could unlock better products, more competitive prices and wider choice for consumers and businesses. The FCA has also published a Feedback Statement, summarising its analysis of the responses it received to its Call for Input (CFI) on potential competition impacts from the data asymmetry between Big Tech and firms in financial services. IT also sets out its proposed next steps.
Key points to note and next actions
If the FCA’s analysis finds Big Tech data is valuable in financial services, it will look to incentivise more data sharing between Big Tech and financial firms through its Open Banking and broader Open Finance work.
If it finds potential risk or harms from non-sharing of data it will also look to develop proposals for the Competition and Markets Authority (CMA) to consider when they are given powers to regulate designated firms’ digital and data conduct, expected via the Digital Markets, Competition and Consumers (DMCC) Bill.
The FCA’s likely next steps will include:
- continuing to monitor Big Tech firms’ activities in financial services, working with its regulatory partners, to assess whether policy changes are needed;
- working with Big Tech firms to examine whether their data from their core digital activities would be valuable in certain retail financial markets;
- depending on these results, developing proposals in the context of Open Finance, for the CMA to consider; and
- examining how firms’ incentives (including Big Tech firms) can be aligned to share data where this is valuable to achieve good outcomes for consumers.