Call for Input: Potential competition impacts from the data asymmetry between Big Tech and firms in financial services

Following an initial consultation on the „potential competition impacts of Big Tech entry and expansion in retail financial services“ in 2022 (EventID 17993) and the issuance of a corresponding response paper (EventID 22183), the Financial Conduct Authority (FCA) is now launching a Call for Evidence on „potential competition impacts from the data asymmetry between Big Tech firms and firms in financial services“.
This Call for Evidence builds upon the findings from the initial consultation where many respondents noted that Big Tech firms such as Google, Apple, or Amazon have a large data base to build on which may put them at a competitive advantage, if they sought to enter the retail markets in insurance, consumer credit, or deposit taking. Moreover, commenters found that such Big Tech firms have access to the data of the financial sector e.g. via open banking channels, but conversely, companies operating in the financial market cannot access the data of the Big Tech firms. Therefore, the FCA is now launching this Call for Evidence to find out the extent of data asymmetry and the potential benefits financial market players expect, if they were allowed access to the data of Big Tech firms. Specifically, the FCA would like comments and possible evidence on the following:
– the extent of the data asymmetry between Big Tech firms and financial services firms in retail financial markets;
– the reasons and underlying factors driving any existing data asymmetry;
– whether this data asymmetry is expected to grow over time and the potential reasons for such an increase, if so;
– the value of the data that Big Tech firms collect from their activities, particularly when combined with financial services;
– possible alternative data sources for financial services firms that may help tap into the data pool of Big Tech firms;
– the potential benefits of regulation that may help mitigate market power of Big Tech firms, if they were to enter the markets; and
– the potential benefits of partnerships between Big Tech firms and financial services firms and corresponding competition concerns.
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Comments and evidence on the noted issues may be submitted to the FCA up to January 22, 2024.