While the FCA acknowledges that consumers could benefit in the short term, it cautions that the big tech companies may be able to use their “ecosystems” and big data stores to “lock in” consumers, as they have in other markets where they are already subject to regulatory scrutiny, such as mobile app stores.
The U.K.’s Financial Conduct Authority is launching an investigation this week into the retail financial services activities of Apple, Amazon, Google and Facebook parent Meta. It is asking major tech companies, their partners and potential competitors for their views on Silicon Valley’s expansion into payments, deposits, lending and insurance.
All four companies have FCA approvals for payments processing in the U.K., and their pace of expansion in financial products appears to be accelerating. Amazon launched a new insurance portal in the U.K. last week, while Apple’s acquisition of London-based fintech startup Credit Kudos earlier this year was seen as another push into payments and consumer lending.
Sheldon Mills, executive director of consumer and competition at the FCA, told the Financial Times that the regulator is “looking ahead” in anticipation of tech companies expanding their presence in the U.K. financial services market, even though some new products – such as Apple’s credit card and new high-interest bank account – are currently only available in the United States.
“We think that given the scale and the large capital reserves that some of these companies might have to support entry, it’s important that we start to understand how competition might develop in our markets,” Mills said.