Big Tech's Play In Finance Poses Systematic Concerns: RBI Governor
Big technology companies' play in the financial sector poses systemic concerns like overleveraging at the borrowers' ends, said RBI Governor Shaktikanta Das on Friday.Â
The RBI will soon be issuing guidelines to make digital lending ecosystem safe and sound, he added.
The entry of firms like Google, Amazon and Facebook (Meta), or big tech companies, into the financial sector also poses question marks around competition and data privacy.
"They (big tech firms) carry risks, which need to be properly assessed and dealt with," Mr Das said while speaking at Modern BFSI Summit 2022 organised by Financial Express.
Such companies can include entities in e-commerce, search engines and social media platforms that have started to offer financial services in a "big way" on their own or through tie-ups, he said, adding this is leading to the use of new methodologies in credit assessment.
"Such large-scale use of new methodologies in credit assessment can create systemic concerns like overleverage, inadequate credit assessment and similar other risks," he added.
The central bank will continue with its role to foster innovation while trying to contain the systemic challenges, he said, adding that the RBI will soon come out with a discussion paper on digital lending.Â
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