Financial institutions’ drive to become more “experience-driven” is opening the door to potential competition from global technology giants, according to a report recently published by the World Economic Forum.

According to the report, the challenge to banks and insurers is down to large technology firms hollowing out the value proposition of these institutions by carrying out more core functions, even as banks and insurers lean ever more heavily on them to compete.

For customers, the entry of large technology firms into financial services could mean entrusting both their financial and non-financial data to the same company. For policy-makers it would raise serious questions about how best to avoid both anticompetitive behaviour and the inappropriate use of personal data in decision-making.