Antitrust and data privacy regulations are insufficient to manage BigFintechs’ economic, social and environmental impacts, says a new UNDP/UNCDF study

The study calls for the establishment of new global governance for BigFintech to contribute to the SDGs in developing countries.


Developing economies do not have enough established mechanisms to mitigate the negative impacts of BigFintechs, nor to seize opportunities brought by BigFintechs, according to a new UNDP/UNCDF study BigFintechs and sustainability, the necessary convergence. A new generation of regulatory policies, based on five proposed principles, is needed to create a foundation that will balance BigFintechs’ commercial interests with sustainable development and public interests, particularly in developing countries, as well as the rest of the world, the study stresses.

Negative outcomes resulting from BigFintech activity in developing countries range from tax base erosion to crowding out of local SMEs, worsening working conditions for digital workers, environmental impacts, widening inequalities, impacts on macroeconomic and monetary policies. One of the main challenges in addressing them is that existing policy approaches to BigFintechs have remained fragmented and disconnected from the broader SDG/ESG debate.

Another issue is that the governing arrangements of such platforms have rarely involved developing economies, where their impacts are often strongest, and the potential for transformation is greatest. Many sub-contractors of BigFintechs operate in developing economies while regulated headquarters are in the USA. Amazon for instance has 1.6 million active sellers worldwide, 300,000+ are in developing economies, 850,000 online resellers rely on this BigFintech as their sole source of income. Current reporting standards are not able to capture the impacts of these complex ecosystems whose potential for both positive and negative impact is huge.

“Developing countries often find themselves at the receiving end of the rapid development of regulatory domains, yet digital economies will increasingly become central to sustainable development. The Dialogue on Global Digital Finance Governance is helping them to understand the impact of BigFintechs on their sustainable development agenda by looking at BigFintech financial services offerings, core businesses and extended ecosystems. There are as many opportunities as risks. This conversation is particularly relevant at a time when many countries are advancing action to mitigate BigFintech impacts. We are not short of tools but we need to drive a convergence of solutions that are relevant to today’s challenges, more inclusive of developing nations, considerate of the SDG choices and sometimes tradeoffs” noted Achim Steiner UNDP Administrator.

In some markets, regulators have adopted measures in response to the new challenges brought by BigFintechs including antitrust actions and new data regulations. For instance, the United Kingdom’s new code of conduct aims to govern dominant tech platforms, the Unites States (US) Department of Justice filled an antitrust lawsuit against Google on internet search and advertising markets, the US Federal Trade Commission conducted a recent antitrust action against Facebook, and China is taking a tougher stance on BigFintech platforms triggered by their systemic relevance, establishing new financial holding and capital regulations.

Current regulations, from financial and data governance to competition regulations, are limited to addressing BigFintech’s impacts on access, monopoly, price discrimination and privacy. They fail to address the SDGs, particularly at the global level, argues the study. The study stresses the need for a broader and more systematic consideration of the impacts of BigFintechs beyond financial regulatory and data governance considerations across social, economic, and environmental domains, particularly in developing economies.

“BigFintechs can have many positive impacts, from financial inclusion to gender equality and new livelihood opportunities. But navigating SDG trade-offs brought by BigFintechs is complex, and our current regulatory toolkit lacks more robust references to sustainability, which does not enable enough developing countries to seize opportunities to leapfrog towards sustainable development. The Dialogue is broadening the lens to bring BigFintechs into the SDG arena and into the international governance space. We need all the collective vision, leadership and ambition to reposition sustainable development for the least developed at the very center of BigFintech governance so digital economies can emerge as SDG aligned.” Added Preeti Sinha, Executive Secretary, UNCDF.


The Dialogue on Global Digital Finance Governance established to explore these topics, produced a series of Technical Papers that bring new, complementary perspectives on the nexus of BigFintechs, sustainable development and governance.

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