Amazon.com Inc. (AMZN) and Alphabet Inc.(GOOGL) subsidiary Google are perfectly equipped to displace banks as the main lenders to small businesses, a former President Barack Obama cabinet member with expert knowledge of the sector has claimed.

Karen Mills, a fellow at Harvard Business School and former White House administrator for small businesses, said at the LendIt Europe fintech conference in London that the two tech giants have what it takes to eventually “dominate the market” at the expense of established lenders.

Her comments came amid calls from some quarters for the federal government to begin granting technology companies special banking charters to improve small business access to funding. Speculation that a revamp of financial regulation for fintech firms could be coming, she claimed, has already struck fear into traditional lenders, many of which recognize that companies such as Amazon and Google have better resources in place to win over smaller businesses.

"If you look at the small business hierarchy needs, they need access to cash, funds, they need time, and they need more sales," she said. "And what if you were able to provide an efficient system that gave them more time to do all their work, access to capital and something that boosts their sales line? You could see how that player could win over a traditional player or even a new fintech."

Amazon has already started to branch out into the lending sector. Earlier this year, the ecommerce giant lent over $1 billion in small business loans to merchants via its website. As of June, Amazon had reportedly handed out $3 billion to help small firms expand inventory and introduce new products. (See also: Amazon Boosts Small Business Lending on Its Site.)

"When I look at it from a U.S. view and a global view, the banks are going to come back in full force, including Barclays (BCS) and others, and then on top of that you're going to have definite presence of Amazon players," Mills told CNBC in an interview after the conference in London. "Amazon has clearly signaled they're going to provide at least financing for their merchants that they know. And that's very smart."

Mills predicted it could only be a matter of time before Google follows Amazon’s lead in beefing up its small business lending operations. The search engine giant’s ability to aggregate information and keep tabs on its users, she claimed, could give it a competitive advantage in the sector, similar to Amazon. (See also: Now Is the Best of Times for FAANG Stocks.)

"If you think about what Amazon already knows about its merchants, and then you think what Google knows about everybody who is buying and selling through its platform, one can imagine a world where they have much more information about both on the credit side but also on the small business itself,” said Mills.

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