Innovation and Competition in Financial Markets

By Ania Thiemann, OECD on the Level

The substantial growth of BigTech firms, such as Amazon, Google, Facebook and Apple, in terms of customer base, international presence, and use of customer data, has drawn the attention of practitioners and policy makers to the potential for such firms to leverage their competitive advantages to compete in segments of financial services.

BigTech is a particular case of FinTech, which is broadly speaking the use of technology and innovation to deliver financial services outside of the traditional bank branches. The FinTech revolution is already substantially changing the delivery of services, the nature of intermediation and competition in the market.^[1] The ubiquitous use of mobile devices has expanded the availability of financial services by allowing for mobile payments (wallet), money transfers (remittances) and online shopping. The integration is particularly advanced in Asia where payment apps are currently serving more than one billion users, providing e-commerce, chat, goods deliveries, food ordering and ride-hailing…

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