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  1. News
  2. Financial Institutions Horizons 2023

Financial Institutions Horizons 2023

15 February 2023
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The outlook for 2023 looks uncertain, following another tumultuous year.  The collapse of a number of large cryptocurrency exchanges has shone another spotlight on the digital asset market. The financial system’s resilience to wobbles in the crypto market had already been tested in 2022 with the onset of a new “crypto winter”. Wider macroeconomic issues are snowballing, and we continue to keep a close eye on developments in Ukraine following its invasion by Russia, China's abandonment of zero-Covid policies, and potential recessions in the West. During uncertain times the economic and political backdrop will create challenges and opportunities. Against this backdrop, our Financial Institutions team continues to support our clients, and identify growth opportunities. We highlight key areas of focus within our 2023 edition of Financial Institutions Horizons.

Index
  1. Next steps

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.

Next steps

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. 

Contacts
Sharon Lewis
Partner
Paris
Tom Astle
Partner
London
Elizabeth Boison
Partner
Washington, D.C.
Francis Booth
Partner
London
Jonathan Chertkow
Partner
London
Antonia Croke
Partner
Hong Kong
Chris Dobby
Partner
Hong Kong
Rita Hunter
Partner
London
Tauhid Ijaz
Partner
London
Rachel Kent
Partner
London
Mark Lin
Partner
Hong Kong
James Maltby
Partner
London
Steven McEwan
Partner
London
Eimear O'Brien
Partner
Dublin
Eoin O Connor
Managing Partner
Dublin
Byron Phillips
Partner
Hong Kong
Emily Reid
Partner
London
Jo Robinson
Partner
London
John Salmon
Partner
London
David Simonds
Partner
Los Angeles
Michael Thomas
Partner
London
Roger Tym
Partner
London
Bryony Widdup
Partner
London
Charles Elliott
Counsel
London
Faraz Naqvi
Counsel
London
Julie Patient
Counsel
London
Dominic Hill
Consultant
London
Susan Whitehead
Senior Consultant
London
George Kiladze
Senior Associate
London
Mark Orton
Senior Associate
London
Stephanie Tsui
Senior Associate
Hong Kong
Julia Cripps
Associate
London
Daniel Lee
Associate
London
Diana Suciu
Associate
London
Jane Griffiths
Counsel Knowledge Lawyer
London
Melanie Johnson
Senior Knowledge Lawyer
London
Virginia Montgomery
Senior Knowledge Lawyer
London
Lavan Thasarathakumar
Senior Advisor
London
Mark Aengenheister
Director
London
Ben Goodman
Principle Consultant
London
Nick Oxley
Principal Consultant - Risk & Compliance
London
Caroline Walters
Director - Hogan Lovells Financial Services Regulatory Consulting
London
Nigel Sharman
Senior Knowledge Lawyer
Hong Kong
Index
  1. Next steps
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Additional Resources
  • Hogan Lovells Financial Institutions Horizons 2023 - Riding the wave
  • SMCR Toolkit
Keywords Financial Institutions, ESG, Digitalization, Digital Assets and Blockchain, European, Loan, Cost of Living Crisis, Consumer Duty, Securitization, The Edinburgh Reform, AI, Tokenization
Languages English
Topics Digitalisation, ESG – Environmental, Social, and Governance, Banking and Loan Finance, Leveraged and Acquisition Finance, Restructuring and Workouts, Sovereign Debt and Restructuring, Securitization and Structured Finance, Banking Products, Banking Regulation, Consumer Finance, FinTech, Financial Services Brexit, Financial Services Litigation and Disputes, Financial Services Regulatory Investigations and Enforcement, Financial Services Securities and Markets Regulation, Funds and Asset Management, Open Banking, Payments
Countries Hong Kong, People's Republic of China, Belgium, France, Germany, United Kingdom
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