Published: May 2017Contents
i) What are the hot topics?
The consumer financial services market is in a period of dramatic restructuring and rapid innovation. Consumers’ demand for simplicity and convenience in financial products and services has drawn major technology firms to the market to compete with traditional financial services providers. New market entrants are faced with a complex reality of trying to innovate in a hotly competitive and heavily regulated space. At the same time, there have been significant changes in the global political landscape that are affecting cross-border investments and payments, broader investments in financial technology, and the nature of regulatory and enforcement oversight.
ii) Tell us about any key legal developments – recent or pending – and their international impact.
In many jurisdictions, legislative, regulatory and judicial authorities are being forced to reconsider settled legal questions in light of the technological advances affecting consumer financial services. Complex questions are challenging traditional concepts of lending and payments, among other consumer financial products and services, particularly with respect to peer-to-peer lending platforms, faster payments initiatives, and distributed ledger technology. An increasingly global marketplace and emerging threats landscape also is forcing financial services providers and other market participants to allocate additional resources to anti-money laundering compliance and data security obligations.
iii) What are the biggest opportunities and challenges for practitioners and clients?
The consumer financial services market has attracted tens of billions of dollars in global investments in recent years – accordingly, almost by definition, there is significant opportunity for clients in this space. However, consumer financial services is a competitive and heavily regulated space. Clients seeking to innovate to remain competitive are frequently challenged with the compliance obligations that come with extensive regulation. Moreover, regulation often has not kept pace with the rate of innovation. Accordingly, clients and practitioners frequently are challenged to educate regulators or to jam the proverbial square peg into a round hole.