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LONDON, Sept 18 (Reuters) - Regulators are looking moreclosely at whether technology companies that provide financialservices should be supervised more heavily like banks, thechairman of Europe's biggest lender, HSBC, said.
As more technology companies offer financial services orhelp customers conduct payments it has raised questions on howfar into banking firms like Apple and Alibaba may go, and how far they should be regulated.
"Regulators all around the world are reflecting on theextent to which Internet companies are conducting bankingbusiness and at which point they should be licensed as banks, orwhether they are simply providing a payment mechanism or somekind of application that facilitates access to banking," HSBCChairman Douglas Flint said late on Thursday.
He said he expected most technology companies would partnerwith banks to avoid the cost and burden of compliance andregulation, such as 'know your customer', or KYC rules.
"The burden of KYC and so on is a significant overhead whichtech companies are not rushing to take on," Flint said.
Flint said he expects technology firms to play anincreasingly significant, and positive, role in banking.
"The tech industry has an enormous contribution to make tothe modernisation and efficiency of the banking industry andgive customers the service proposition they want, but there areissues on the way."
One potential problem was how customers' financial data isused.
"There has to be debate and clarity and transparency on whoowns the data, where's it held, how secure is it and whoseresponsibility is it when it goes wrong.
"The richness of financial data is why many tech companieswant to get into payment services, and you're all going to haveto make choices at some point on how much of your payment flowinformation you want to share," he said.
Flint, speaking at an event about banks in China, wasresponding to a question about competition from the likes ofAlibaba and Tencent.
He declined to comment on HSBC's review of whether to moveits headquarters to Hong Kong or elsewhere from London. The bankis reviewing its domicile, and said it will make a decision bythe end of this year. (Reporting by Steve Slater; Editing by Susan Fenton)
