The Netherlands Authority for the Financial Markets (AFM) writes in a new trend report that it is becoming increasingly difficult to monitor large tech companies such as Google, Amazon and Microsoft. These companies are increasingly present in the European financial sector.
Stiff competition for banks
The regulator says it is important that there is more international and cross-sector cooperation in the supervision of the tech giants. This supervision is sometimes difficult at the moment. For example, information may not always be shared between Dutch supervisory authorities such as the AFM and the Dutch Data Protection Authority (AP). The AFM may only share a lot of data with other financial regulators, not with the AP.
In the Netherlands, the large tech companies limit their financial interference to payments for the time being. For example, Apple has entered into a partnership with various Dutch banks for Apple Pay.
At the same time, a collaboration between Deutsche Bank and Google announced earlier this year shows, according to the AFM, that the large tech companies are also entering the financial sector in other areas. Google not only provides cloud services to Germany’s largest bank, but will actively participate in devising new financial services.
According to the regulator, these developments have effects on the financial sector in Europe. In the Netherlands too. Due to the large customer bases, powerful brands and large financial reserves, it is to be expected, according to the AFM, that large tech companies will also be able to quickly conquer a place in other areas of financial services.
According to the regulator, banks and other financial parties are increasingly faced with very tough competition. In addition, more and more companies are seeking access to people’s personal financial data.
This process is not only facilitated by technological developments, European regulations also stimulate this. As a result, not only large parties such as Google, but also all kinds of smaller tech companies are increasingly engaged in services that were previously only provided by banks.