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BIS will have a level playback area for banks among threats from companies like Facebook



The Bank for International Settlements (BIS), which is often described as a bank for central banks, has issued its annual report for 2019, which expresses concerns about expected disruption that large companies such as Facebook enter the finance area.

While titled "Great Economy in Economics: Opportunities and Risks", see the report on the risks and challenges of companies such as Alibaba, Amazon, Facebook, Google and Tencent, and pay smart service to the potential benefits of this fine tech revolution.

These companies have developed large customer bases, says BIS, and have the advantage of a "data network activity loop" that gives them "the potential to become dominant."

money management, insurance and lending has just begun, giving it the potential for major changes in the financial industry.

On the benefits, BIS writes:

"Big tech's low-cost structure can easily be upgraded to provide basic financial services, especially in places where a large proportion of the population remains unbanked. Using large data and analysis of the network structure of their established platforms, big techs can assess the risk to borrowers, and reduce the need for security to ensure repayment. As such, major technologies are in place to increase the efficiency of financial services, promote economic inclusion and allow related gains in economic activity. "

But such a change gives new dangers, according to the report. In addition to the old financial stability and consumer protection issues, big techs have the potential to grow very rapidly as systemically relevant financial institutions. "BIS recently claims reports from Facebook's new Libra project, which sees social media giant" considering offering payment services for its customers on a global basis. "

There are also" important new and unknown challenges "that BIS suggests The report says that "Big techs have the potential to become dominant through the benefits of the data network activity loop, increasing competition and privacy issues."

As such, policies for a "comprehensive approach" will be needed. on Financial Regulation, Competition Policy and Data Protection Regulation.

"The goal should be to respond to big tech's entry into financial services to take advantage of the gains while limiting risk. As the operations of big tech's overall regulatory perimeters and geographical boundaries are coordinating authorities ̵

1; nationally and internationally – crucially, "the report said. disruptors say:

"Regulators must ensure equal competition between big techs and banks, taking into account the big tech's broad customer base, access to information and comprehensive business models."

And with such large companies that have the ability to work across By international borders, international co-ordination of rules and standards is needed to cope with the potential shift in the "risk-benefit balance", says BIS. regulators that the company seeks to launch financial services for its billions of users.

France has already moved to create a mission for the G7 nations to investigate the problems Libra has accumulated, while US lawmakers have also expressed concerns about the project.

BIS headquarters image via Shutterstock


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