De Nederlandsche Bank (DNB) warns against the growing activities of large technology companies such as Google, Amazon, Apple and Facebook in the financial sector. A report published on Thursday calls on the financial supervisor to adapted regulations and more European supervision. Existing financial institutions must also be ‘firmly challenged’ on the sustainability of their revenue models, now that they face competition from big tech.
In recent years, tech companies have become more active in financial services, such as through payment apps and online trading platforms. According to Steven Maijoor, Director of Supervision at DNB, digitization is blurring boundaries between entities that are and are not supervised. These developments have accelerated as a result of the corona pandemic. DNB wants to ensure that the confidence and stability of the financial sector is preserved through ‘a reorientation’ of supervision.
Because the tech companies operate globally at the same time, proper supervision of their financial activities is only possible at an international level, according to DNB. According to the report, this should be monitored at a European level to begin with. Supervisors also need to cooperate more, for example in the areas of cyber security, data protection, competition and financial supervision.