How Might Net Non-Neutrality Impact Banking?

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19 December 2017
Craig Focardi

New Cost and Competition For Payment and Lending Services

On December 14th the Federal Communications Commission (FCC) voted to repeal its “Net Neutrality” regulations for online and mobile internet providers.The vote would eliminate current rules barring internet providers from blocking or slowing down access to online content, and would eliminate a rule preventing providers from prioritizing their own content. The decision must first be formally approved by the Office of Management and Budget and would go into effect some time in 2018.Oversight of internet protections will then shift from the FCC to the Federal Trade Commission.

The key concern for consumers and business customers is that large, dominant telecommunications and media firms will control internet access, speed and price relative to today’s freer markets. The question here is what impact might net non-neutrality have on banking markets?Despite the recent ruling, net non-neutrality still might not happen. But if it does, what issues should financial institutions be thinking about?

Although the cost of storage and communication speeds in banking have improved, telecommunications costs continue to increase.Furthermore, financial institutions need to increase spending on new technologies such as artificial intelligence while maintaining spending to support existing operations.Increased telecommunications costs could therefore impact needed capital for new IT spend, operating efficiency metrics and financial returns.

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Insight details

Corporate Banking, Retail Banking
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Banking, >>Retail & Business Banking
Insight Format
Geographic Focus
North America