IMF warns of Big Tech threat at G20 summit
(11 June 2019 – Global) The International Monetary Fund has warned of the challenges the arrival of Big Tech firms in financial markets present to financial stability and efficiency.
IMF chief Christine Lagarde warned of significant disruption to the financial landscape by firms like Amazon, Apple and Google, who will likely use their enormous customer bases and deep pockets to offer financial products based on Big Data and AI.
Says Lagarde: "These developments hold out the promise of accelerating inclusion and modernising financial markets, but raise, in addition to privacy issues, competition and market concentration concerns, both of which could lead to vulnerabilities in the financial system."
Ms Lagarde voiced her concerns in an address to the G20 summit in Tokyo citing China’s technology industry as a prime example of the trade-off between benefits and challenges.
"Over the last five years, technology growth in China has been extremely successful and allowed millions of new entrants to benefit from access to financial products and the creation of high-quality jobs. But it has also led to two firms controlling more than 90 percent of the mobile payments market. This presents a unique systemic challenge to financial stability and efficiency."
The IMF in partnership with the World Bank last year published a 12-point policy agenda aimed at helping member countries to harness the benefits and opportunities of rapid advances in financial technology, while at the same time managing the inherent risks. Lagarde says the results of discussions with 96 member countries on the policy paper will be published later this month.