The data sharing paradox: BigTechs in finance

Abstract

The European wave of regulatory interventions aimed at promoting access to data and data sharing shows no signs of stopping. However, concerns are being expressed about alleged unintended consequences of data portability in financial markets. In particular, new calls have been voiced to contain the engagement of BigTech platforms with retail banking. The paper argues that asymmetrical regulatory measures imposed on BigTechs entry in the financial industry may tilt the market in favour of incumbent banks. Indeed, as FinTech start-ups seem more likely to work alongside incumbent banks rather than compete with them, limiting the entry of BigTechs may remove the only effective source of competitive pressure for traditional bank, thereby ultimately frustrating the pro-competitive potential of the access to account rule enshrined in the revised Payment Service Directive (PSD2).