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Top officials from the central bank umbrella group Bank for International Settlements (BIS) have said that central banks and financial regulators need to urgently face the fact that the power and influence of big tech is growing.

Watchdogs from around the globe have voiced concerns regarding the copious amounts of data controlled by groups like Facebook, Google, Alibaba, and Amazon. The data could potentially allow the companies to reshape finance so quickly that it destabilizes banking systems.

In a paper, lead-authored by Agustin Carstens, the BIS pointed to China as an example, where two big tech companies are responsible for 94% of the mobile payments market.

Tech companies want to do more

Across multiple jurisdictions, tech companies are now establishing a presence, lending to individuals and small businesses, and offering services like wealth management and insurance.

The BIS paper, published on Monday, said that the entry of big tech in financial services has given rise to new issues surrounding market power consolidation and data governance.

The paper added that there was scope for specific entry-based rules in the EU, China, and the US. It also said that any impact on the integrity of the monetary system arising from the growth of dominant tech platforms needs to be concerning for central banks.

What could happen

Stablecoins (cryptocurrencies tied to existing currencies) and other big tech initiatives, could change the game for the monetary system, according to the paper, if the companies end up in closed-loop systems reinforced by data collected from eCommerce platforms and social media.

The paper said that this may lead to the breaking up of payment infrastructure, which may be a detriment to the public. It also warned that the absence of currently dominating platforms should not be a source of comfort for central banks.

It would seem that central banks are under threat now and would like to keep their hands on the steering wheel.