May 24, 2019
A Torys-authored article on the future of banks and Big Tech was featured by PE Hub Canada. The original piece was originally issued in the Q2 edition of Torys Quarterly.
PE Hub Canada published the story, penned by Blair Keefe, Joel Ramsey and Eli Monas, which focuses on financial institutions’ engagement with fintech companies and their continuing compliance with OSFI and other regulators.
A small excerpt from the article is below.
Given these big tech companies have strong capital positions and likely access to low-cost capital (in addition to access to proprietary customer data generated through other services, such as social media) to tailor their offerings to individual customers’ preferences), the FSB notes such companies could very quickly achieve scale in financial services.
However, while big tech companies could represent a source of increased competition, their participation in financial services may not necessarily result in a more competitive market over the longer term if big tech companies were to operate with lower margins (due to cross-subsidization). In particular, the FSB notes that a greater market share of big tech may be associated with unchanged or higher concentration, along with a change in composition away from traditional players.
The Q2 edition of the Torys Quarterly focuses on changes in technology, regulators and courts forcing organizations to evolve and act quickly in order to remain competitive.