Our financial institutions clients are increasingly turning to us for support with the adoption and implementation of blockchain technology and the increasing use of digital assets. We have developed our Digital Assets and Blockchain practice (DAB) over the past year to allow us to work alongside our clients as the market continues to mature, enabling them to take advantage of blockchain and cryptoassets' huge potential while helping them navigate an ever-evolving legal and regulatory landscape. The group brings together a multi-disciplinary team with experience across all industry sectors to provide a coordinated approach and full service offering to our clients operating in or exploring the DAB space. Recently we have seen key developments in the future regulatory framework for the wider regulation of cryptoassets which is really starting to take full-service shape. In the UK, HM Treasury’s recent publication of the long-awaited consultation paper and call for evidence setting out proposals to mark the next stage of the UK’s phased approach for introducing a UK regulatory regime for cryptoassets is a step in the right direction, aiming to reflect the opportunities and potential risks that cryptoassets present.
ESG is still an important area of focus for investors, consumers and regulators and how they choose to interact with businesses. We look at the UK’s equivalent to the EU Sustainable Finance Disclosure Regulation and the potential divergence in approach from other international regimes, as well as the legal and regulatory risks of ESG greenwashing in Hong Kong.
December 2022 saw the publication of the long-awaited Edinburgh Reforms, which provide further detail on the future of UK financial services regulation post-Brexit. The key aims of the reforms include ensuring that the UK’s financial markets remain an open and attractive place to do business promoting the effective use of capital. We comment on what the measures mean for firms in the sector.
We also look at the increasing use cases for the safe and responsible adoption of artificial intelligence (AI) and machine learning across financial services. We examine how the UK's Senior Managers and Certification Regime (SM&CR) could be fine-tuned to provide an oversight and governance framework for AI systems in firms and explore the possibility of AI in an outcomes-based approach to Consumer Duty and how much space firms should make for AI in their interactions with consumers.
Regulators are also riding the wave of the impact of political and economic turbulence leading to supply chain issues, inflation, rising interest rates, and a terrible cost of living crisis for many. We highlight the issues which need to be considered by financial institutions, focusing in particular on the UK but also with snapshots of similar trends in Ireland and the U.S.
My sense is that 2023 will not be an easy year. However, I do hope you find this edition of Financial Institutions Horizons informative and thought-provoking, which may help guide you through 2023. If you have any questions or would like to speak to our team about any of the challenges or opportunities you’re facing, please do get in contact with us.
Download the Financial Institutions Horizons 2023 Brochure here and for any further information, please contact any of the individual authors.
Authored by Tom Astle, Elizabeth Boison, Francis Booth, Jonathan Chertkow, Antonia Croke, Chris Dobby, Rita Hunter, Tauhid Ijaz, Rachel Kent, Sharon Lewis, Mark Lin, James Maltby, Steven McEwan, Eimear O'Brien, Eoin O Connor, Byron Phillips, Emily Reid, Jo Robinson, John Salmon, David Simonds, Michael Thomas, Roger Tym, Bryony Widdup, Charles Elliott, Faraz Naqvi, Julie Patient, Dominic Hill, Susan Whitehead, George Kiladze, Mark Orton, Stephanie Tsu, Julia Cripps, Daniel Lee, Diana Suciu, Jane Griffiths, Melanie Johnson, Virginia Montgomery, Lavan Thasarathakumar, Mark Aengenheister, Ben Goodman, Nick Oxley, Caroline Walters, and Nigel Sharman.