The context of de-risking
In the past decade, the financial services sector across the globe has experienced increased regulatory scrutiny, particularly in the areas of financial crimes, anti-money laundering (AML) and anti-terrorist financing (ATF) regulation.
Financial institutions have generally reacted to the new regulatory environment by bolstering their compliance and risk management divisions with increased budgets and headcounts.[i] However, as the price and regulatory risk of banking increases, some financial institutions are assessing the cost-benefit analysis of certain activities and are opting, simply, to exit entire product lines or customer segments. This phenomenon is one aspect of what is … Continue Reading
On 22 May 2017, the Financial Stability Board (FSB) and the Committee on the Global Financial System (CGFS) released a report entitled “FinTech credit: Market Structure, Business Models and Financial Stability Implications” (the “Report”). The Report aims to provide an accurate picture of the extent and nature of Fintech credit activity by analysing the functioning of Fintech credit markets, including the size, growth, and nature of such activities, and the benefits and risks of Fintech credit platforms.… Continue Reading
In March 2017, the European Commission (EC) issued a public consultation document on Fintech. Cloud computing is a major area covered by the EC request for comment and requires delicate balancing between innovation and risk minimization. On one hand, cloud is an easily scalable and cost effective way for financial institutions to manage their data storage and processing. However, cloud also presents major banks with increased cybersecurity and compliance risk. The topic of cloud is particularly relevant because certain Fintech enterprises may not be subject to the same regulatory constraints as major financial institutions.
The European Banking Authority (EBA) published … Continue Reading