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By Huw Jones
LONDON, Feb 8 (Reuters) - A rethink is needed on how to directly regulate activities of Big Tech companies in financial services, given their size and influence, a top official at an international forum for central banks said in Wednesday.
Data-rich Big Tech companies such as Alibaba and Amazon have been involved for some time in financial services such as banking, payments, asset management and insurance, with some also providing cloud computing to run key services for banks.
Their size and reach in social media and e-commerce means they can quickly build up market share in financial activities, Bank for International Settlements General Manager Agustin Carstens said in a speech.
This creates a risk of them becoming "too big to fail" - a problem regulators hoped they had solved with banks after bailouts in the financial crisis over a decade ago.
"Without a doubt, a regulatory rethink is warranted, and we need a new path to follow," Carstens said, adding a new "holistic" framework was needed that included requiring Big Tech financial services to be ring-fenced from other operations.
Their vast troves of data give Big Tech firms valuable information about potential financial services customers, such as their wealth and spending habits. Companies from Jumia in Africa to Grab in southeast Asia are trying to tap into that by providing services such as credit and payments processing.
Big Tech firms with significant financial activities...
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