FS23/4: Potential competition impacts of Big Tech entry and expansion in retail financial services 

Read FS23/4

Discussion Paper (DP22/5) aimed to stimulate conversation on areas where Big Tech entry is likely to create the biggest competition benefits for consumers and where there is the greatest risk of significant harm if competition does not develop effectively. 

Feedback and our response

We received responses from a wide range of stakeholders including Big Tech firms, regulated financial services firms, trade associations, challenger firms, consumer organisations and research institutions. We also held a webinar and roundtable events for industry participants to gather views.

In this Feedback Statement we set out: 

• feedback on our analytical entry framework and entry scenarios 
• feedback on potential competition benefits and harms 
• feedback on stakeholder regulatory concerns 
• our actions and next steps 

Various key themes emerged following respondents’ feedback and our engagement events: 

• differing Big Tech business models and strategies 
• refining our analytical framework 
• data access and data sharing 
• Big Tech activity at, or beyond, our regulatory perimeter 
• overlaps with regulators and other regimes

Who will be interested in this publication 

This Feedback Statement will be of interest to all market participants, potential entrants, and authorities with an interest in the potential competition impacts of Big Tech entry and expansion in retail financial services. 

It will be of particular interest to: 

• Big Tech firms 
• Established regulated financial services firms 
• Smaller challenger firms (including fintech firms) 
• Trade bodies of regulated firms 
• Consumers 
• Groups representing consumers’ interests 
• National and international competition authorities and regulators with an interest in digital markets. 

Next steps 

Our strategy commits to shaping digital markets to achieve good outcomes, including our work on open banking & open finance, the development of regulatory approaches for Critical Third Parties (CTPs) and artificial intelligence (AI).  

Following the feedback received to DP22/5, and to complement our ongoing programme of work in relation to digital markets, we are proposing three additional next steps.  

1. Launch, by the end of 2023, a Call for Input on Big Tech firms as ‘gatekeepers’ and key drivers including the role of data sharing asymmetry between Big Tech firms and financial services. 
2. Review our supervisory approach for Big Tech firms given they are active across different financial sectors with complementarities between them and with the Big Tech firms’ core products and services. 
3. Continue our work with the Government and the Digital Markets Unit (DMU) as the new Digital Markets, Competition and Consumers Bill passes through Parliament; and, at the appropriate time, set out the detail of how we will implement the regulatory coordination provisions in the Bill through a memorandum of understanding with the DMU.

See Chapter 3 of this Feedback Statement for more information on each of our current actions and next steps.