The policy-making body has been actively monitoring fintech market developments and their potential implications for financial stability.

While welcoming the improvements in service quality promised by competitive new entrants, the FSB believes that a disruptive shake up in the market "could materially alter the universe of financial services providers".

"Greater competition and diversity in lending, payments, insurance, trading, and other areas of financial services can create a more efficient and resilient financial system," the report states. "However, heightened competition could also put pressure on financial institutions’ profitability and this could lead to additional risk taking among incumbents in order to maintain margins. Moreover, there could be new implications for financial stability from BigTech in finance and greater third-party dependencies, for example in cloud computing services."

While the FSB views the relationship between incumbent financial institutions and fintech firms as largely complementary and cooperative in nature, the threat posed by Big Tech cannot be ignored.

Equally, reliance by financial institutions on third party data service providers in cloud storage and physical connectivity is another area which merits further research.

"As fintech firms, BigTech firms, and the markets for third-party services continue to develop, it will be important to continue monitoring these developments and their financial stability implications," states the body. "Further efforts on third-party dependencies are ongoing in the standard-setting bodies. The FSB Financial Innovation Network (FIN) is further exploring the market for third-party services for financial institutions, including how they manage lock-in risk and cross-border issues. Moreover, FIN is looking into the activities of BigTech in finance, including cross-border activities."