Buckley, Ross P., Arner, Douglas W., Zetzsche, Dirk A., Selga, Eriks K.
Singapore Journal of Legal Studies
March 2020, pp 35-62
Abstract: Fintech is now defined by a long-term, global process of digitisation of finance, increasingly combined with datafication and new technologies including cloud computing, blockchain, Big Data and artificial intelligence. Cybersecurity and technological risks are thus evolving into major threats to financial stability and national security. This trend has been magnified by the COVID-19 crisis which has heightened dependence on digital technologies and seen substantial parts of the population working from home through systems of questionable security. Additionally, the entry of BigTech firms brings two new issues. The first arises with new forms of potentially systemically important infrastructure. The second arises because data--like finance--benefits from economies of scope and scale and from network effects and--even more than finance--tends towards monopolistic or oligopolistic outcomes. This leads to potential systematic risk from new forms of "Too Big to Fail" and "Too Connected to Fail" phenomena. We suggest some basic principles about how to address this entire range of risks.