FinTech and Blockchain Law Watch – Page 60 – At the Crossroads of Law, Innovation and Commerce

Salesforce is all in on Fintech

Mar 17 2016

Salesforce wants to get in on the Fintech act, recently announcing the public launch of “Financial Services Cloud”. This is a service that allows financial advisors to be more productive with relevant client information.

The service aims to better position advisors in “managing client life goals, household relationships and client profiles from a connected platform”. Financial Services Cloud has a variety of features including portfolio management, prospecting and data management whilst also assisting with compliance with new and proposed regulatory changes. These features leverage areas which Salesforce is historically strong in, namely automation and analytics.

While start-ups abound, Salesforce clearly wants to bring its pedigree to the table to work with large established market participants. This new offering is certainly likely to be sold strongly to Salesforce’s existing customers, including Goldman Sachs, Deutsch Bank and Merrill Lynch.

With Financial Services Cloud, it will be interesting to see if this takes over from in-person meetings that customers may have with their advisors, which can be both clunky and time consuming. Salesforce seeks to provide some real data-driven insight into investment decisions that will give customers more of an understanding of their personal wealth whilst increasing the oversight on wealth advisors.

You can find out more from Simon Mulcahy (General Manager of Financial Services, Salesforce) here.

The Financial Stability Board’s fintech priority for 2016

Mar 16 2016

By Jim Bulling and Michelle Chasser

The Chair of the Financial Stability Board (FSB), Mark Carney, has sent a letter to G20 finance ministers and central bank governors outlining the FSB’s priorities for 2016.

One of the five priorities is to assess the implications of fintech innovations and systemic risks that may arise from operational disruptions. The FSB is currently evaluating potential financial stability implications of fintech for the financial system as a whole. The findings of this evaluation will be discussed at the FSB’s March Plenary meeting.

The letter also acknowledged that a number of fintech innovations are now receiving close attention and that the regulatory framework must be able to manage any systemic risks without stifling innovation.

Any decisions made by the FSB following the assessment are likely to have a flow on effect to how G20 members including the US, the UK, Australia and the EU regulate the fintech sector.

The Chair’s letter can be found here.

Asia Pacific Governments increase support for fintech

Mar 16 2016

By Jim Bulling and Michelle Chasser

Following on from the launch of the Fintech Advisory Committee last month, the Australian Treasurer, Scott Morrison, has announced that the Australian Government will provide AU$150,000 to fund fintech hub Stone & Chalk’s Asia Program based in Shanghai. In making the announcement Mr Morrison said “We will support the industry in its objective of making Australia the leading market for fintech innovation and investment in Asia by 2017”.

The Hong Kong Government is also currently laying the foundations for a strong regulatory and financial support system for the fintech sector in Hong Kong.

We know about FinTech, but what’s RegTech?

Mar 11 2016

By Jacob Ghanty

The UK Government announced in last year’s budget its commitment to the early adoption of new technologies to support FinTech companies to meet the greater reporting requirements and higher regulatory standards imposed by the UK regulators, notably the Financial Conduct Authority (“FCA”). The name given to these technologies is “RegTech”. RegTech is part of a wider project launched by the Government to enable the UK to capitalise on the development of new financial business models and disruptive innovation and become the world’s leading FinTech hub. In November 2015, the FCA published a call for input on how it should progress its RegTech work.

The FCA’s RegTech focus sits alongside its efforts to increase innovation in financial services more broadly under its “Project Innovate” initiative and its development of a “Regulatory Sandbox” for businesses to test innovative products, services, business models and delivery mechanisms without immediately incurring all the normal regulatory consequences of pilot activities. In its call for input on RegTech, the FCA identified some early emerging themes that it considers worth exploring further with the FinTech community. Of particular interest is the proposal that real-time and ‘system embedded’ compliance and risk evaluation tools be developed for financial institutions. Other areas highlighted by the FCA as relevant to this space are: technology accelerators, big data techniques, visualisation and robo tools, software integration tools and cloud technologies.

Firms in the UK FinTech space are advised to follow RegTech developments as they are likely to have a significant impact on the interaction between businesses and regulators.

A New Cyber Regulator on the Beat: The CFPB Issues its First Cybersecurity Order and Fine

Mar 09 2016

By Ted Kornobis

On March 2, 2016, the Consumer Financial Protection Bureau (“CFPB”) instituted its first data security enforcement action, in the form of a consent order against online payment platform Dwolla, Inc.

The CFPB joins several other regulators that have recently issued statements or instituted enforcement actions in this space, including the Securities and Exchange Commission (“SEC”), Commodities Futures Trading Commission (“CFTC”), the Financial Industry Regulatory Authority (“FINRA”), the National Futures Association (“NFA”), the Department of Justice (“DOJ”), state attorneys general, and the Federal Trade Commission (“FTC”), which has been active in this area for several years.

To read more click here.

Islamic Finance and FinTech

Mar 04 2016

By Jonathan Lawrence

FinTech and Islamic finance techniques are both disrupting traditional structures in the conventional financial industry. Therefore it is appropriate that companies, investors and consumers aiming to be Islamic-compliant are able to use technology to increase access to financing structures that accord with their beliefs or those of their markets in the Muslim and non-Muslin worlds.

Mobile based Islamic-compliant banking is on the rise, especially among those who were previously unbanked for logistical or religious reasons. Among the most prominent disruptive ventures in Islamic finance is Dubai-based Beehive, a platform that aims to provide low-cost alternative financing to small and medium-sized enterprises (SMEs) and is the first peer-to-peer lending platform in the world to have received independent Shariah certification for its investments. Beehive has so far provided more than $4bn in financing for SMEs in the United Arab Emirates.

FinTech in the UK: Regulating Disruption

Mar 04 2016

By Sonia Gioseffi, Shehram Khattak, Jonathan Lawrence and Ronnie Yearwood

Without doubt, FinTech companies are in some ways deconstructing the services offered by larger banks in the UK and elsewhere. However, risks are not resolved because of the technology, as information and financial products are marketed and sold via web-based platforms, social media or other technological applications. Consumers still need to be clearly informed about the firms and the financial products being offered. Firms must still ensure that they adhere to the principle that their communications are “fair, clear and not misleading”. It is, therefore, better for a FinTech firm to apply and take advice on best practice in this regard, which saves money and time in the interim, than to wait either for enforcement from the regulator or for market failure to drive responses. Find our longer article here.

Payment Services and Money Transfer in the FinTech Space: What is Next?

Mar 04 2016

By Jacob Ghanty and Tom Wallace

On 23 February 2016 our London office hosted a seminar discussing the future of payments and money transfer and the opportunities and challenges for businesses in this space, featuring talks from leading industry experts Anthony Watson of Uphold Inc. and Jean-Stéphane Gourévitch of Matchi.biz, alongside our partners Jacob Ghanty and Tom Wallace. Find a link to the audio recording and slides of the event here.

London Calling: London FinTech Podcast

Mar 04 2016

By Jonathan Lawrence

If you’re interested in the industry view from London, how about listening and subscribing to London FinTech Podcast? It provides access to many of the leaders in the London FinTech space and provides podcasts discussing topics including start up and emerging growth, marketplace lending, crowdfunding, alternative currencies, payment systems, equity funding, invoice finance, investment and the existing financial services response to FinTech innovations.

Fintech investment in the UK – a $901m business

Mar 04 2016

By Cameron Abbott and May Giuliani

Investment in fintech systems is becoming increasingly popular globally, but no more so than it is in the UK. Deal volumes in the UK have been growing at 74% per year since 2008 (compared with 27% globally). This digital disruption marks the most major period of change for financial services companies in decades.

According to recent data, the UK alone accounted for $901 million of the $12.5 billion invested in fintech worldwide last year. Five other European nations combined for $1.1 billion. This huge investment in the UK included two of the top 20 fintech deals in the world – Challenger Bank Atom raised $125 million, and peer-to-peer lending platform Funding Circle raised $150 million. Over 60% of fintech venture capital investment investments in 2015 were made into alternative finance and payment services such as Funding Circle, Currency Cloud and Transferwise.

See here for The 2015 Fintech Investment Landscape, February 2016.