The Bank for International Settlements (BIS) alerted on Sunday to the risks concerning big tech companies' venture into financial services. "Big techs have the potential to become dominant through the advantages afforded by the data-network activities loop, raising competition and data privacy issues," the BIS wrote in its report.
The bank cited anticompetitive practices such as "favoring their own products and trying to obtain higher margins by making financial institutions’ access to prospective clients via their platforms more costly." Another concern is data access. "Once their dominant position in data is established, big techs can engage in price discrimination and extract rents. They may use their data not only to assess a potential borrower’s creditworthiness, but also to identify the highest rate the borrower would be willing to pay for a loan or the highest premium a client would pay for insurance."
