Regulators not up to speed on banks’ digital marketplaces, EU watchdog says

Regulators have little understanding of risks from banks creating digital marketplaces with tech companies and a framework is needed to spot potential contagion if things go wrong, the European Union’s banking watchdog said on Tuesday.

The European Banking Authority’s warning is the latest sign that financial regulators are starting to pay more attention to Big Tech’s increasing links with finance, such as in cloud computing.

Finance and tech companies are coming closer together as banks set up digital marketplaces for products like payments and mortgages, as well as other financial and non-financial services, a process which has accelerated since the pandemic began.