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Big techs’ business model is geared towards operating digital ecosystems of interconnected products and services. At the moment, big tech platforms mainly operate outside finance in areas such as e-commerce, internet search or social media. Leveraging their strong technology capabilities, some big techs are also important providers of IT services and infrastructure such as cloud computing and data analytics. Amazon Web Services (AWS), for example, is one of the dominant players in cloud computing for financial institutions in areas such as risk management, core banking systems and data analytics.
This paper provides an overview of the current regulatory landscape for big techs operating in finance and discusses avenues for improvement. Section 2 describes why big techs are unlike other entities and deserve regulatory attention. Section 3 outlines their regulatory treatment and the financial licenses.
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