Big Tech in finance and Covid-19

Six weeks into lockdown, and six+ seasons into our favourite Netflix series, we are starting to see some clear beneficiaries of the Covid-19 outbreak. 

Microsoft, Facebook, Netflix, Google and others in the Big Tech circle have reasserted their dominance in the coronavirus era, powering a ferocious stock market rebound in this tech-friendly recession. 

It is the general consensus among many commentators that businesses with a strong digital or online offering will be set to grow the most market share coming out of Covid – 19, with more products now being sold digitally than ever before. 

Throw Open Banking into the mix, or PSD2 as it’s known in Europe, and will this be the moment when we start to see Big Tech using this climate to make more focused inroads into the financial services sector? 

Open Banking is a new(ish) set of regulations, which started coming into effect in 2018, that allows third party technology companies and other FinTechs to access bank's customer data provided they have permission from the customer. This has been allowing Big Tech to get in on the action with the likes of Amazon looking to use open banking to make more informed lending decisions to bolster its relatively small lending business.

We had noted that in 2020 we expected to see continued and more coordinated scrutiny of these moves from Big Tech by regulators in the finance, data and competition spheres. But in light of Covid-19, regulatory attention is likely to be diverted elsewhere.

The role of big data is likely to play a key part in innovation in Financial Services as the Tech companies provide vital components to new and innovative products – such as the data, pipes and technology that financial services needs to evolve. 

Data becomes everything to be able to manage products online, and with Big Tech being the masters of these technologies, there may not be a better time to strike.