What's happening?

The UK's financial regulator, the Financial Conduct Authority (FCA) is seeking views on the potential competition benefits and harms from Big Tech firms’ entry into a range of retail financial services sectors.

To begin the discussion, the FCA has published analysis focusing on the potential competition impacts of Big Tech’s entry in four retail sectors: payments; deposit taking; consumer credit; and insurance.  See here: DP22/5: The potential competition impacts of Big Tech entry and expansion in retail financial services (fca.org.uk) 

The FCA recognises that, by combining financial services with their existing business, Big Tech firms can bring benefits to consumers. These might be innovative product propositions and highly competitive pricing (driven, for example, by increased efficiency and through healthy competition with incumbent financial services providers).

But in the longer term, the FCA recognises that Big Tech firms could pose competition risks if they rapidly gain market share, and they are able to exploit their market power and vast scale and resources.

The FCA is inviting input from stakeholders by 15 January 2023


The FCA has three operational objectives:

  • maintaining market integrity
  • protecting consumers
  • increasing effective competition for the benefit of consumers

On this basis, it is no real surprise that the FCA has announced it is investigating Big Tech's provision of financial services, given the increasing prominence these firms play, their absolute scale and potential for disruption (and therefore - in theory at least - potential for harm).

It is also a likely response to the pro-digital agenda promoted by the UK government (the FCA being keen to ensure that digital markets operate in an orderly manner), as well as consistent with other work by the FCA into both (a) the resilience of critical technology service providers and (b) online safety and fraud prevention.

It is important for stakeholders to engage in the conversation so that all views are represented.