This content is from: Corporate

Editorial: The new big four

Big technology companies – namely Amazon, Apple, Google and Facebook – have cropped up here and there in IFLR's coverage over the years. Up until a year or so ago that was largely in the context of competition law, looking at how antitrust regulators and regimes are approaching this new type of company. More recently we've also looked at their struggles with data protection legislation.

This month's cover story, though, looks at a new development: big tech taking on financial services.

In the past few months, Facebook has announced plans for its own cryptocurrency, the Libra coin; Apple has technically become a bank with the launch of its own credit card, and Amazon has continued to work behind the scenes on a range of strategic partnerships with financial services firms. Google, meanwhile, has been on the scene since 2015 with its payment service Google Pay.

As these companies look to capitalise on the market positions, household reputations and vast reserves of data – not to mention their technology capabilities –they've built up over the relatively few years since their incorporation, they've all got one eye on various parts of financial services.

Everybody knows that the face of modern banking is slowly changing. The incumbents have been under increasing threat from newer, nimbler fintech companies for some years now. That, they're used to – but the entrance of four of the six largest companies in the world is a different thing altogether.

It's no secret that, despite their best efforts, antitrust regulators have struggled to control these Silicon Valley behemoths. The development of new legislation always lags behind new technology, and in many cases, by the time a rule becomes law, the tech has already moved on.

Ironically it could be their entry into financial services that trips them up from a regulatory perspective. The banking world is practically unrecognisable from even 10 years ago, with its near-impenetrable web of regulation covering everything from capital requirements to the behaviour of individuals. There are, quite literally, millions (Mifid II is 1.3 million paragraphs long) of ways to be tripped up by financial services legislation.

As Americas editor John Crabb finds, once these technology companies get a real understanding of what life in financial services could be like, they may well regret this latest business decision. Just ask the banks.

Enjoy the issue,

Lizzie Meager
Managing editor

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