“So you have to start thinking very hard about the question of expanding the regulatory remit to those firms providing services to the incumbents,” said Mr Alder, also chief executive of the Securities and Futures Commission of Hong Kong.
The rise of fintech in China, which is being led by Ant Financial and Tencent, also raised questions for global banking regulators, he said. “It gives rise to a set of questions around the data available to those firms.”
The extent to which regulators are grappling with the emergence of the new players in financial services was highlighted by Elisabeth Roegele, deputy president of Germany’s Federal Financial Supervisory Authority (BaFin).
“We have new players on stage – Google and Amazon – who are completely different,” she told the event in Sydney.
“They have no license, but they are now in the product chain and we have to find solutions [to] limit risks and protect data privacy. That is a challenge for us as regulators.”
Maureen Jensen, chief executive officer of the Ontario Securities Commission in Canada, said the traditional approach of regulating products or firms must be reconsidered as traditional sectors merge.
“We have been set up to regulate insurance, or regulate banking, or securities – but the issue we see is everyone starting as a new players they don’t see boundaries, they are doing everything. And the incumbents are also doing everything. So it becomes very difficult to regulate, and it makes no sense to continue to regulate in the silos we are doing today.”
On the sidelines of the event, ASIC chairman James Shipton said the growing influence of big tech players was an issue all regulators, including ASIC, were grappling with and it was not yet clear what the answer was.
Government policies including open banking, which is being introduced in Australia and Britain, could increase the access global technology firms have to banking data, accelerating their influence.
The Hong Kong Monetary Authority in the past week has granted new “virtual” banking licenses to Chinese companies including Ant Financial, Tencent and PingAn unit OneConnect.
Mr Alder said this “raises a heap of questions around the interaction between richer sources of data available to big tech companies, the provision of financial services and data ownership and the fairness that goes around that.”
“And that will not be confined to big tech companies – it will be relevant to incumbents. They will all have to deal with this because the regulatory context will change rapidly.
“All of this will combine into a single conversation, particularly in financial services, in the coming months and years, and it is hard to know how it is going to turn out.”
Mr Alder also told the event that Europe’s data privacy regulation, known as GDPR2, was creating challenges for regulators in Asia, who rely on information sharing for enforcement actions. Hong Kong has struck an arrangement with the European Data Protection Board to allow information to continue to flow after this was initially restricted by the regime.