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- Lawmakers, regulators and even bank lobby groups like the Consumer Bankers Association have expressed concerns that due to Big Tech’s foray into financial services, a growing share of banking activity has occurred outside the purview of regulators, putting consumers and the resiliency of the financial system at risk.
- Regulators worried Big Tech was too big to fail and could cause the next financial collapse.
- Companies like Amazon and Google host most banking activity on their cloud networks and regulators fear a glitch at even one cloud company could bring down key services across multiple banks and countries, leaving customers unable to make payments or access services, and undermine confidence in the financial system.
- According to CNBC, if Big Tech were to actually follow through with launching checking accounts, as Google and Amazon have both at one point announced they would do, it would be smaller, regional banks that would end up taking a hit. That is because fintech companies like Chime and SoFi tend to partner with smaller, regional banks, while Big Tech so far has partnered with Big Banks in their financial services offerings.