Regulators are looking more closely at whether technology companies that provide financial services should be supervised more heavily like banks, the chairman of Europe’s biggest lender, HSBC said.
As more technology companies offer financial services, or help customers conduct payments, it has raised questions on how far into banking firms like Apple and Alibaba may go, and how far they should be regulated.
“Regulators all around the world are reflecting on the extent to which internet companies are conducting banking business and at which point they should be licensed as banks, or whether they are simply providing a payment mechanism or some kind of application that facilitates access to banking,” HSBC chairman Douglas Flint said.
He said he expected most technology companies would partner with banks to avoid the cost and burden of compliance and regulation, such as ‘know your customer’, or KYC rules.
“The burden of KYC and so on is a significant overhead which tech companies are not rushing to take on,” Mr Flint said.
Mr Flint said he expects technology firms to play an increasingly significant, and positive, role in banking. He said the tech industry had an enormous contribution to make to the modernisation of the banking industry.