Financial Institutions Horizons 2024

If you had told me that we would leave 2023 having lost one of Switzerland’s largest banks, and yet also emerge relatively unscathed (at least by 2008 standards), I would have found it hard to believe. Add to this rising interest rates, and last year had the potential to be incredibly tense.

In many ways, it is a testament to the regulation put in place post 2008 that further market disruption was avoided. 2023 was a good reminder of the role of these regulations in maintaining robust, transparent markets, and building resilience.

That said, 2023 has also proved to us that as we address known risks across the financial sector, new risks necessarily emerge. For example, the run on Silicon Valley Bank was like none other seen before, largely down to the speed of communication via social media and the fact that money can now be moved at the touch of a button. 2023 was also the year that we began to address the risks associated with so-called shadow banking, understanding the extent to which we do not have transparency over the flow of capital.

After a sobering year and a half for crypto markets, we have started 2024 with the approval of bitcoin ETFs in the US. Pension funds and retail investors can now buy bitcoin without touching the underlying asset. It is a watershed moment for traditional finance meeting innovation and disruptors. Not only has there been a strong appetite for the bitcoin ETF across the banking world, but it comes alongside a continuing interest in tokenization. While remaining risk adjusted, the opportunities presented by digital assets for driving transparency and efficiency will reshape traditional finance.

The risks and uncertainties in question for the financial sector are not confined to the financial world. ChatGPT and other large language models showed us that development in technology is now exponential, with accompanying risks that few of us can really understand.

As this drives nations to collaborate on regulatory solutions and standards, the geopolitical landscape appears fragmented and fragile. The tragic wars in Ukraine and the Levant are reminders that little is certain, conflict tends to escalate quickly and, most of all, wars are expensive on all fronts. We also prepare ourselves for nearly half of the world’s population heading for general elections this year. Though outcomes for these may appear certain, the knock-on effects of these outcomes are not.

What can we learn from 2023, and how can we prepare as we head into 2024? How can we ensure we have the appropriate risk management and robust governance measures that will enable us to adapt to the changing landscape? Our five themes for FIS Horizons in 2024 look to address this:

Riding the Wave

‘Unprecedented’ is becoming an overused term for the 2020s, with new challenges and uncertainties emerging globally. As we look ahead to another year of ongoing conflict, supply chain disruption, key general elections, and continuing inflationary trends, we look at how the financial sector can adjust and mitigate risks.

Accelerating Change and Innovation: Regulatory Change

Adapting to the evolving landscape requires regulatory frameworks that appropriately address the risks of today. In this chapter, we look at the regulatory developments that are enabling change and innovation, and the divergence or convergence across key jurisdictions.

Digital Transformation

Where strong governance and risk management are impossible without the correct technology in place, new risks also emerge from digitalization. From digital assets to AI, we look at how digital transformation is influencing the laws, rules, and regulation of financial activities.

ESG

2023 was the hottest year on record globally. The role of the financial sector in financing climate action, and the governance and social considerations that go with this, continue to be a key focus for our clients and for us in 2024.

Diversity and Inclusion

Diversity and inclusion is another key topic for us: diversity of thought drives strong governance and helps us avoid ‘group think’; financial inclusion not only drives diversity, but unlocks value across markets. As we navigate the turbulence of 2024, we look at how the financial sector may take action while keeping these two factors in mind.

2024 may well be another testing year. It may also prove, like some of 2023, that we have the ability to adapt, build resilience, and drive change where needed. We hope that you find this edition of 2024 informative and stimulating, and invite you to contact us with any questions or challenges you are facing.

 

Click here to view Financial Institutions Horizons 2024

 

Authored by: Sharon Lewis, Charlotte Bonsch, Dr Tim Oliver Brandi, Marcus Busch, Aaron Cutler, Lisa Davey, Julia Dingeldey, Andreas Doser, Andrew Eaton, Claire Ellis, Vincent Fidelle, Robert Gardener, Jason Hitch, Tauhid Ijaz, Melanie Johnson, Emily Julier, George Kiladze, Rachael Koc, Sam Krips, Sebastian Lach, Virginia Montgomery, Paul Mullen, Alex Nicol, Eimear O'Brien, Jennifer O'Connell, Moritz Panten, Ana Patwardhan, Dr Richard Reimer, Dr. Mike Karl Schmidt, Stefan Schrewe, Tomas Schurmann, Jochen Seitz, Nigel Sharman, Dervla Simm, Diana Suciu, Hannah Vero, Susan Whitehead, Bryony Widdup, Isobel Wright, Christina Wu.

 

Contacts
Sharon Lewis
Partner
Paris
Beata Balas-Noszczyk
Partner
Warsaw
James Black
Partner
London
Tim Brandi
Partner
Frankfurt
Louise Crawford
Partner
London
Aaron Cutler
Partner
Washington, D.C.
Victor de Vlaam
Partner
Amsterdam
Vincent Fidelle
Partner
Paris
Jeffrey Greenbaum
Partner
Rome
Sebastien Gros
Partner
Paris
Rita Hunter
Partner
London
Tauhid Ijaz
Partner
London
David Leggott
Partner
London
Andrew McGinty
Partner
Hong Kong
Paul Mullen
Partner
London
Eimear O'Brien
Partner
Dublin
Eoin O Connor
Managing Partner
Dublin
Ivan Peeters
Partner
Brussels
Richard Reimer
Partner
Frankfurt
Pierre Reuter
Office Managing Partner
Luxembourg
John Salmon
Partner
London
Jochen Seitz
Partner
Frankfurt
Andrew Taylor
Partner
London
Michael Thomas
Partner
London
Roger Tym
Partner
London
Leopold von Gerlach
Partner
Hamburg
Yasmin Waljee
Partner
London
Bryony Widdup
Partner
London
James Wood
Partner
Sydney
Fenella Chambers
Counsel
London
Andreas Doser
Counsel
Frankfurt
Franck Dupret
Counsel
Paris
Andrew Eaton
Counsel
London
Alejandro Gonzalez
Counsel
Madrid
Stefan Schrewe
Counsel
Frankfurt
Elisabetta Zeppieri
Counsel
Rome
Charles-Henri Bernard
Senior Associate
Brussels
Mark Orton
Senior Associate
London
Anahita Patwardhan
Senior Associate
London
Dervla Simm
Senior Associate
London
Julia Dingeldey
Associate
Frankfurt
Aliya Padhani
Associate
London
Mike Karl Schmidt
Associate
Frankfurt
Diana Suciu
Associate
London
Hannah Vero
Associate
Dublin
Christina Wu
Associate
London
Mark Bennett
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Claire Ellis
Counsel Knowledge Lawyer, Banking, London
London
Margaret Kemp
Counsel Knowledge Lawyer
London
Isobel Wright
Counsel Knowledge Lawyer
London
Melanie Johnson
Senior Knowledge Lawyer
London
Emily Julier
Senior Knowledge Lawyer
London
Nigel Sharman
Senior Knowledge Lawyer
Hong Kong
Virginia Montgomery
Senior Knowledge Lawyer
London
Charlotte Bonsch
Knowledge Lawyer
Paris
Matt Bubb
Head of Infrastructure, Energy, Resources and Projects, Asia Pacific
Singapore
Mark Aengenheister
Director
London
Robert Gardener
Director of Government Affairs
London
Caroline Walters
Director - Hogan Lovells Financial Services Regulatory Consulting
London
Lisa Davey
HL Solutions - Senior Business Consultant
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Susan Whitehead
Senior Consultant
London
Luke Grubb
Consultant
London
Dominic Hill
Consultant
London
Lavan Thasarathakumar
Senior Advisor
London

 

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