The chief of the Financial Conduct Authority (FCA) has said the UK’s financial services may need to prepare for a “techlash” as big tech threatens to damage financial inclusion and security of data and services.
In a speech on 23rd January, Nikhil Rathi warned that “new forms of fraud and harms” created by technologies like quantum computing and artificial intelligence (AI) could jeopardise the security of digital identities and overall trust in tech.
“We may have to brace ourselves for the Techlash,” Rathi said.
Envisaging this potential scenario, he said tech and banking heavyweights could “gobble up the competition”. The lines between gaming, gambling, entertainment, trading and investing could “become so blurred as to endanger people’s long term financial wellbeing,” he added.
It comes as cyber fraud, cyber attacks and identity fraud are accelerating rapidly in scale and sophistication, with a rally in the cybersecurity market expected as a result.
Rathi said big tech’s foray into financial services could benefit many in the short term. “But in the longer term, there was a risk that the competition benefits could be eroded if the firms exploited their entrenched market power,” he explained.
Rathi added to “expect more deployment of our criminal powers in the year ahead” as the FCA looks to deter those causing consumer and market harm.
In July last year, the FCA’s flagship Consumer Duty regulation came into force, which also applies to consumer technology in financial services.
Source: City AM
