Working Paper: CEPR ID: DP18665
Authors: Sebastian Doerr; Jon Frost; Leonardo Gambacorta; Vatsala Shreeti
Abstract: The entry of big tech companies into the financial services sector can bring significant benefits in terms of efficiency and financial inclusion. Yet big techs can also quickly dominate markets, engage in discriminatory behaviour, and harm data privacy. This leads to the emergence of new trade-offs between policy goals such as financial stability, competition and privacy. Regulators, both domestically and internationally, are actively working to address these trade-offs. This paper provides an overview over the state of the literature and the policy debate.
Keywords: big tech; financial inclusion; competition; financial stability; data privacy
JEL Codes: E51; G23; O31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| big data utilization (C55) | improved access to credit (G21) |
| big tech entry (L63) | market dominance (L11) |
| market dominance (L11) | potential algorithmic discrimination (J70) |
| regulatory environment (G38) | big tech credit activity (G24) |