Big Tech Push Into Financial Sector Raises Concerns: RBI

Plans by Big Tech to foray additional into India’s monetary sector pose dangers for conventional banks because the tech companies have the potential to develop into dominant gamers in monetary companies, the central financial institution mentioned.

The plans can even create governance-related challenges for regulators, the Reserve Bank of India (RBI) wrote in its bi-annual monetary stability report on Thursday.

Major know-how companies “straddle many different lines of business with sometimes opaque overarching governance structures,” it mentioned.

The RBI mentioned issues included operational dangers, too-big-to fail points, challenges for antitrust guidelines, cybersecurity, and information privateness. But it added that constructive outcomes may embody effectivity positive factors and extra entry to monetary companies.

Amazon and Google presently present fundamental fee companies in India. Both corporations as properly Facebook and others have utilized for licences to function broader retail fee and settlement programs in partnership with Indian corporations similar to Reliance and lenders.

The central financial institution’s warnings come at a time of a lot pressure between the Indian authorities and US tech giants over points that vary from e-commerce guidelines to information privateness and content material posted on their platforms. Amazon, Facebook, Facebook-owned WhatsApp, and Twitter have all been caught up in disputes with New Delhi.

India’s largest state-run financial institution and UNI Global Union which represents about 20 million staff globally final month additionally raised issues in regards to the entry of huge tech corporations into the nation’s funds sector.

© Thomson Reuters 2021