Regulating and supervising BigTech in finance

The presence of BigTech platforms in finance brings potentially many benefits: cost reductions, higher productivity, financial inclusion, tailoring of products to clients and convenience. However, this is just one part of the story. Unlike FinTech, BigTech activities may end up impairing competition in the medium to long term, as well as harming consumer protection, market integrity and financial stability. If these risks materialize, BigTech may end up reducing welfare. The two main drivers behind this potential outcome are BigTech's business model, and regulatory and supervisory asymmetries. The significant increase of BigTechs' economic dominance has triggered doctrinal and policy debates that are coalescing around a new approach to competition policy, with entity-based proposals of various types. These initiatives pave the way to significant changes in the approach through which large digital platforms are regulated and supervised in finance. Albeit currently financial services represent only a small fraction of their revenues, BigTechs' influence goes much beyond that, as they offer also non-financial services which are essential for all financial competitors. And they could very quickly become too big to fail. Removing the most critical regulatory asymmetries which hinder the attainment of authorities' objectives calls for strengthening fundamental horizontal regulations -in particular, operational resilience- as well as treating BigTechs as entities performing financial and non-financial roles of crucial importance for financial and economic stability.