On 21 March 2022, the Financial Stability Board (FSB) published a report regarding FinTech and Market Structure in the COVID-19 pandemic – Implications for financial stability.

The main outcome of the report was that the COVID-19 pandemic has accelerated the trend toward digitalisation of retail financial services. While comprehensive data on the market shares of FinTechs, BigTechs and incumbent financial institutions in retail digital financial services are scarce, proxies suggest that BigTechs and larger FinTechs have further expanded their footprint in financial services.

This expansion can bring benefits such as improved cost efficiencies and wider financial inclusion for previously underserved groups. However, the report cautions over the potential for market dominance. In some markets, concentration measures are high, but there is no evidence of a generalised increase.

There could be negative financial stability implications from dependence on a limited number of BigTech and FinTech providers in some markets. There could also be consumer protection risks from greater dependency on technology and data protection issues.

The report outlines the types of actions taken by authorities during the COVID-19 pandemic that may impact market structure and the role of different firms in providing digital financial services and stresses the importance of cooperation between financial authorities and, where relevant, with competition and data protection authorities.