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FIS Horizons

2020 is likely to be another eventful year in the Financial Institutions Sector. The question is, how do we address – and even embrace – this change and how do we make the most of the opportunities that change brings?

Embracing Change

By Sharon Lewis, Head of Financial Institutions

We regularly hear from clients and colleagues alike that there has never been a more challenging time to be operating in the financial institutions sector. Across the world, market volatility, trade wars, populism, digitalisation, environmental issues and regulation are bringing about a new era of change. The question is, how do we address – and even embrace – this change and how do we make the most of the opportunities that change brings?

More than 10 years after the collapse of Lehman, regulators are continuing their work to make the financial world a safer place. In this edition we look at some of the developments – from the move away from IBOR to risk-free reference rates and the potential litigation risk that follows, to the increasing challenges financial institutions face in meeting compliance requirements ranging from AML and sanctions, to diversity and culture. Keeping track of change can be difficult; our Regulatory, Compliance and Investigation Solutions tool has been designed to help clients keep on top of their compliance risks. 

Following the theme of convergence and divergence, we look at the new EU Directive on preventative restructuring frameworks which is part of the EU capital markets union, and at some of the issues Brexit raises for financial institutions. We also discuss some of the encouraging signs that markets are opening up - from PSD2 in the EU to open banking in Asia-Pacific and the new Foreign Investment Law in China.

Sustainable and impact finance is a fast growing area as regulators and the financial institutions sector react to climate change. Law, regulation, policy and practice and market recommendations on a national level and EU level look set to increase.

Technology and innovation continue to shape the sector, with regulators encouraging innovation both from FinTechs and from the more traditional banking sector. We’re also witnessing the development and increasing usage of cryptocurrencies. Whether these developments will bring new levels of regulation remains to be seen but certainly there is clear evidence that regulators are starting to think hard about these topics. Whatever the outcome, the new technologies being developed and used in our business will shape all our futures.

Here we’ve collected a global snapshot of topics on the horizon which we think will help shape your next 12 months. You will also find lawyers associated with each topic, please contact them if you want to discuss anything further.

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