The Queen's Jubilee celebration granted us all with a lovely 4-day weekend where the sun shone just in time to enjoy the festivities. Speaking of the Queen, today marks one month on from her infamous speech, which set out the Government’s legislative agenda for the new parliamentary year.
It's fair to say that all eyes are on six key bills regarding financial services and the FinTech community and so in case you missed it, here is a quick breakdown of what they are and what they mean to us as individuals and to businesses alike.
Financial Services and Markets Bill
The government is committed to maintaining its global leadership of the UK’s financial sector and this area of the Bill, focuses on authorised push payment (APP) scams which will affect FinTechs. This Bill clarifies that the PSR (Payment Systems Regulator) can use its existing regulatory powers to make reimbursement in cases of APP scams, necessary in designated payment systems, including Faster Payments.
This is a potential issue for FinTechs that are payment services providers that do not fall under the FSCS (Financial Services Compensation Scheme) so may lack the financial insurance to cover all claims.
Besides this, much of the meat of this Bill will be about strengthening the UK's financial services against international competition. UK regulators will have specific objectives to support the growth and international competitiveness of the sector.
Most importantly, the government has stated that an aim of the Bill is to "harness the opportunities of innovative technologies in financial services" - in other words, that's a massive shout out to FinTech! Alongside this, they have also declared their support for the safe adoption of cryptocurrencies.
You can read HM Treasury’s announcement on the Bill here.
Data Reform Bill
The government’s aims for this Bill are to create a new and trusted UK data protection framework that reduces burdens on businesses, boosts the economy, helps scientists to innovate and improve the lives of people in the UK. It also aims to increase our participation in Smart Data Schemes, which will give individuals and small businesses more control over their data.
The main focus of this Bill will certainly be on reform to current GDPR laws. There isn't much information on what this reform would look like but we're given some ideas that it would reduce certain burdens on businesses by making it clearer how data can and can't be used.
Online Safety Bill
The Online Safety Bill has generated a lot of debate since its first draft was published in May 2021. Since then it has been strengthened and clarified, with the aim of delivering on the government’s manifesto commitment to make the UK the safest place in the world to be online while defending free expression. It also seeks to minimise the likelihood of fraudulent adverts being published to make it harder for fraudsters to advertise scams online.
This is an area of interest for financial services and FinTech because of the prevalence of online fraud and scams. Large social media platforms and search engines will be required to enhance their prevention in hosting or publishing fraudulent paid-for advertising. The hope is that this will be an important step in reducing APP scams at source (see above) so that consumers are less likely to be defrauded. This creates a more sustainable, long-term solution than banks having to reimburse victims.
Brexit Freedoms Bill
This Bill aims to “lighten the regulatory burden to boost UK businesses”. This will allow the Government to more easily unpick and amend the EU law currently on the statute book to better suit the UK. This is in a bid to improve the nimbleness and competitiveness of the UK, whilst still maintaining high standards. For areas where we'd usually find red tape, financial services and fintechs will suddenly have more freedom to carry out certain activities. More information on these restricted areas to follow in another #FTWL article...
Draft Digital Markets, Competition and Consumer Bill
Creating a ‘best in class’ competition regime is the main aim of this draft Bill. The two key elements are:
The Competition and Markets Authority will be empowered to decide for itself when consumer law has been breached and issue monetary penalties for those breaches.
The Digital Markets Unit (DMU) will be given new powers to proactively address the root causes of competition issues in digital markets, including imposing interventions to inject new competition into the market.
This will place an obligation on tech firms to report any new mergers and give consumers more choice and control over their data. Additionally, the DMU will also be able to designate a small number of firms with ‘Strategic Market Status’ – these are firms that are very powerful in particular digital activities, such as social media and online search – with the objective of preventing these firms from abusing their market dominant positions as the expense of consumers and other businesses.
Economic Crime and Transparency Bill
This is a wide-ranging Bill to tackle illicit finance and reduce economic crime. Key points of interest include the introduction of new powers to more quickly and easily seize and recover crypto-assets, which the government considers to be the main resource used for ransomware.
Companies House will also be given more effective investigation and enforcement powers. The accuracy of data held by Companies House will be strengthened by the introduction of identity verification for people who manage, own and control companies and other UK registered entities. Better cross-checking of Companies House data with other public and private sector bodies will also be introduced.
Lastly, the government intends to enable businesses in the financial services sector to share information more effectively to prevent and detect economic crime.
-
If you would like to join an ever-growing network of Financial Technologists, to be kept up to date with current and ongoing news, events and opportunities within the industry, you can register your interest here!
Liz. #FTWL
Comments