Watchdog: Big tech coming for big bank profits

Giant technology companies are moving inexorably into the finance business and could quickly upend the banking industry, according to the financial industry’s global watchdog.

In its most detailed report on the impact of what it called “BigTech,” the Financial Stability Board said the disruption could introduce new risks into the system by compelling banks to loosen lending standards and take on greater risk.

The FSB, which comprises the G-20’s central banks and supervisors, said companies such as Alibaba Group, Apple, Amazon.com and Tencent Holdings could exploit their troves of data and massive customer bases to quickly expand their payments and wealth-management businesses.

The competitive threat to banks is compounded because these well-capitalized firms are already at the forefront of technology — artificial intelligence and machine learning-that financial firms just now developing.

Underscoring the challenge, Ant Financial, the Chinese financial services giant controlled by billionaire Jack Ma, on Thursday said that it was acquiring London-based payments company WorldFirst in its biggest move into the U.K.

Born out of an online payments system for Alibaba’s e-commerce platforms, the business has grown into a financial behemoth with few equals: Its estimated $150 billion valuation dwarfs those of Goldman Sachs and Morgan Stanley. Alipay and its global affiliates had 1 billion users as of February.