Cautions raised on Facebook’s move into finance

Agustín Carstens, general manager for the Bank of International Settlements (BIS) warned of Big Tech’s increasing reach into financial services

Carstens said that Big Tech needs monitoring as it broadens its scope of services into credit and beyond. He added that Facebook’s Diem, in particular, needs scrutiny.

Carstens delivered his remarks as part of a BIS conference titled “Regulating big tech: Between financial regulation, antitrust and data privacy.”

Carstens noted that Big Tech-enabled credit grew by 40% in 2020 alone, to a total of $700 billion.

He said that the rise of Big Tech firms offering payments, credit, insurance, wealth management and more in every major region of the world has been a remarkable one: “Big Techs were virtually nonexistent in financial services only a decade ago.

But thanks to network effects, where users attract more users, Big Techs have achieved scale rapidly”.