Bigtechs and financial services: some challenges, benefits and regulatory responses

Abstract

The pandemic has speeded up the digital transformation of Spanish society. Cloud computing, data analytics and remote interactions have become even more essential, forming the basis for a new industrial and commercial reality in which large technology companies (BigTechs) are at an advantage. Against this background, financial services are increasingly attracting the attention of these market players; they allow them to diversify their income and offer them channels to boost their main activity. BigTechs are gradually gaining ground in the financial arena, becoming more prominent in the most profitable segments and strengthening their position as the providers of essential services for banks. In response to this challenge, financial authorities are building a new regulatory and supervisory framework for financial platforms. Although still in its early stages, the specific character of this framework is beginning to become clear. In combination with other cross-sectoral frameworks (e.g. for competition), it will discipline the behaviour of these agents in the financial sector. This article analyses the current situation of BigTechs in the financial industry, as well as the most important legislative initiatives taking shape in the European Union in this area.