View in browser

#234 RegTech X Weekly | The FCA publish the full list of fines for 2022; Coinbase reaches a $100 mln settlement with NYDFS; predictions 2023 and more | Fwd to a friend

Good morning !

Good morning and Happy New Year!

I hope you had a good break over the festive period.

We kick off 2023 with a look at some RegTech and FinTech predictions for the year ahead. A common prediction is that FinTech will receive much greater scrutiny from regulators this year. One of my own predictions is that we’ll see the use of artificial intelligence (AI) increase significantly over the next year.

A report from Thomson Reuters Regulatory Intelligence provides an interesting take on the state of the FinTech/RegTech markets as we start 2023. The report notes that those within the industry are seeing an increasingly diverse range of uses for financial technology. However, at the same time, there are signs that industry growth is slowing.

Also in this edition of RegTech X, there’s news in relation to bank fines, AML, crypto regulation, open banking, and ESG.

Take care,

Evgeny

A link for your friends and colleagues to subscribe.

Regulator UK

■︎ In 2022, the Financial Conduct Authority (FCA) canceled the authorisation of more than 200 companies because the firms didn’t meet minimum standards. This reflects the regulator’s new data-led and assertive approach, which enables it to find and deal with problem firms quickly. (FCA) 2 mins

■︎ Late last year, the FCA and the Prudential Regulation Authority (PRA) fined TSB Bank £48.7 million for operational risk management and governance failures. Technical failures in TSB’s IT system resulted in customers being unable to access banking services. (FCA) 2 mins

■︎ Bankers at TSB and Santander UK are at risk of having their annual bonuses slashed after the banks were hit with large fines by the FCA last month. Santander was fined over £100 million by the regulator. (Guardian) 2 mins

■︎ The FCA has published a full list of the fines it handed out last year. In total, its fines amounted to £216 million. (FCA) 2 mins

Regulator US

■︎ US financial regulators are warning banks about the risks crypto assets pose to consumers. Though the Federal Reserve, Federal Deposit Insurance Corp (FDIC), and the Office of the Comptroller of the Currency didn't outright discourage banks from engaging in crypto tokens, the agencies said they're stepping up their oversight of banks with business interests in the industry. (Finextra)

■︎ Coinbase's compliance program is "immature" and "a simple check-the-box exercise" according to New York financial regulators. The crypto company was hit with $100 million in penalties for a lackluster background check and compliance system. (Gizmodo)

■︎ Danish manufacturer Danfoss agreed to pay nearly $4.4 million to settle allegations a subsidiary violated U.S. sanctions by running payments from customers based in Iran, Sudan, and Syria through the foreign branch of a U.S. financial institution. (Compliance Week)

■︎ Coinbase agreed to pay $50 million to New York state regulators and to spend another $50 million over the next two years to improve its compliance program. (Radical Compliance)

■︎ The FTC proposed a new rule that would ban employers from imposing noncompetes on their workers, a widespread and often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses. (FTC)

■︎ US employers may have a new labor regulation to follow: this week, the Federal Trade Commission proposed a ban on noncompete clauses. If passed, companies would have to change millions of contracts and policies, and provide evidence to the FTC of compliance. (NBC news)

Regulator EU

■︎ The European Securities and Markets Authority (ESMA) has a new logo and visual identity. The design of the new logo embraces the ESMA Strategy for 2023-2028 and its key twin drivers: sustainability as well as technological and data innovation. (ESMA) 1 min

■︎ Late last year, ESMA published a final report specifying the information to be provided, and the templates to be used, to inform competent authorities of the cross-border marketing and management of investment funds and the cross-border provision of services by fund managers. The aim of the report is to standardise the content and the format of the information to be provided by management companies, UCITS, and AIFMs. (ESMA) 2 mins

■︎ Deutsche Bank has been asked by the European Central Bank (ECB) to maintain higher capital. The regulator is pushing banks to reduce the risks they face in the leveraged finance business. (Retail Banker International) 2 mins

■︎ Lawyers at DLA Piper say that the Central Bank of Ireland (CBI) imposed a record level of fines on financial institutions last year. The regulator slapped fines totalling €213.6 million on eight firms, including a €100 million penalty for the Bank of Ireland due to failings linked to tracker mortgages. (Law Society) 2 mins

Regulator Asia

■︎ The Hong Kong Monetary Authority (HKMA) recently published its Quarterly Bulletin. This featured an article on developments in the banking sector. (HKMA) 1 min

■︎The Green and Sustainable Finance Cross-Agency Steering Group recently announced that it has entered into a collaboration arrangement with CDP, an international non-profit organisation that runs the global environmental disclosure system for companies. The two parties will work together to enhance climate and environmental disclosure and improve data availability and accessibility in Hong Kong. (HKMA) 3 mins

■︎ In December, The Hong Kong Institute for Monetary and Financial Research (HKIMR) published a report on climate risk measurement. The report reviews global financial institutions’ motivations and challenges associated with climate risk measurement and presents the results of a survey and interviews commissioned by the HKIMR. (HKMA) 2 mins

2023 predictions

■︎ In this Forbes article, I make a few technology predictions for 2023. One is that we’ll see more FinTech development across various jurisdictions. (Forbes) 4 mins

■︎ Another prediction of mine for 2023 is that we’ll see solutions with more incorporation of artificial intelligence and automation. Users are looking for simple, efficient, and risk-adverse solutions, and RegTech companies will have to meet those desires in order to stay competitive and relevant. (Business Cloud) 4 mins

■︎ In this FinTech Futures article, Henry Balani, Head of Industry and Regulatory Affairs at Encompass Corporation, makes a number of regulatory-focused predictions for 2023. Balani believes there will be a strong focus on privacy and transparency this year. (FinTech Futures) 3 mins

■︎ Arvin Abraham, UK FinTech Partner at McDermott Will & Emery has provided five FinTech predictions for 2023. Abraham believes that it will be much harder to fundraise over the next 12 months. (Finextra) 4 mins

■︎FinTech strategist Linas Beliūnas has made a number of FinTech predictions for 2023. Beliūnas believes that RegTech will boom this year. (Substack) 5 mins

■︎ Wiley has posted some corporate criminal enforcement predictions for 2023. Its experts believe that prosecutors will focus on companies’ policies governing the use of personal devices and third-party messaging platforms this year. (Wiley) 4 mins

Crypto regulation

■︎ Coinbase has reached a $100 million settlement with the New York Department of Financial Services over its compliance programme. The exchange has been fined $50 million and has agreed to invest an extra $50 million to update its compliance system. (Crypto Briefing) 2 mins

ESG regulation

■︎ Today, nearly every strategy and planning session among board members and C-suite leaders addresses ESG. Yet many companies feel they are not ready for potential new required ESG disclosures and need additional resources, necessary internal data, and more time. (CFO Dive) 4 mins

AML

■︎ The Hong Kong Monetary Authority (HKMA) is set to scale up its AML efforts in 2023. In an interview for the ‘AML Tech Barometer 2023’ report, Executive Director Carmen Chu discussed the actions the HKMA is taking to disrupt AML threats to Hong Kong, the impact of increased collaboration across the private and public sectors, and technology initiatives that are making a difference. (Regulation Asia) 3 mins

RegTech & FinTech

■︎ Thomson Reuters Regulatory Intelligence (TRRI) has published a report on FinTech, RegTech, and the role of compliance in 2023. The report says that there are signs of a slowdown in the growth of the FinTech sector. (Thomson Reuters) 4 mins

■︎ RegTech will be the hottest thing in Web3 in 2023. That’s the view of FinTech strategist Linas Beliūnas. (Substack) 2 mins

■︎ In recent years, many people have said that the banks are boring, unable to change, incapable of being truly digital, and challenged by challenger banks and FinTech. Yet here we are in 2023, and all of the challengers and start-ups are begging for banks to work with them. Chris Skinner looks at what has happened. (The Finanser) 2 mins

■︎ The UK tech sector has retained its crown as the biggest in Europe with a market value of £820 billion. It makes Britain third in the world behind the US (£15.7 trillion) and China (£4.2 trillion). (MSN) 3 mins

■︎ Top UK FinTech firms have called for urgent clarity on the future of open banking. Monzo, Wise, Moneyhub, and more than a dozen other FinTechs have written to UK regulators to complain about the progress so far. (Altfi) 2 mins

■︎ UK authorities have published an update on plans for a successor to the Open Banking Implementation Entity (OBIE). Following an order by the Competition and Markets Authority (CMA), the OBIE was set up in 2017 by the UK's nine biggest banks to implement the open banking regime. (Finextra) 2 mins

■︎ The UK's top banks have clubbed together to pay for the development of shared banking hubs across the country. Banks involved include Barclays, HSBC, Lloyds, and Santander. (Finextra) 2 mins

■︎ Finextra has provided a link to its most downloaded research reports last year. The most popular report was one on open banking. (Finextra) 3 mins

■︎ Researchers at Visa have been investigating how to enable automatic recurring payments for self-custodial crypto wallets. In a technical paper, the researchers investigate how to bring the commonplace automatic recurring payment option to the world of crypto and blockchain. (Finextra) 2 mins

■︎ Wyre, a crypto payment firm that came close to being acquired for $1.5 billion last year, is on the brink of liquidation, according to reports. Two former employees of Wyre confirmed the looming shutdown in a conversation with Axios. (Finextra) 2 mins

■︎Banking as a Service (BaaS) is its own next-generation business model, but it also enables other new business models, says Nicolas Pinto of Skaleet. It gives banks the ability to leverage their investments in IT by getting other banks to switch from their outdated IT to modern platforms. (LinkedIn) 3 mins

■︎ FinTech expert Jason Boud has put together a list of blockchain and crypto-asset research he found most useful last year. You can find them here. (LinkedIn) 2 mins

■︎ The crypto industry has been rocked by the collapse of FTX. In a video here, CNBC looks at what went wrong. (CNBC) 10 mins

■︎The latest Risk and Regulation Unravelled podcast marks Gavin Stewart's farewell appearance on the show. In this podcast, he talks to David Morrey about the Edinburgh Reforms, the deleted call in power, and a festive season-sized package of regulatory developments. (Grant Thornton) 2 mins

■︎ In December, the Bank of England (BoE) published a short blog on blockchain regulation. The BoE noted that blockchains could one day become critical financial infrastructure. (BoE) 2 mins

RegTech X Weekly Round up

by Evgeny Likhoded

30 Churchill Place, Canary Wharf, London UK

Not interested?
Update your email preferences to choose the types of emails you receive.
Unsubscribe from all future emails