Regulatory frameworks race to catch up with innovation

New technologies, including distributed ledger technology and artificial intelligence, continue to prompt questions as to the application and suitability of existing financial regulation. New business models and the entry of BigTech into the financial sector have also raised questions as to the adequacy of current frameworks. As regulators across the globe grapple to uphold the principle of “same activity, same risks, same rules”, we are likely to see more clarifications and amendments to regulation.

Increasing regulation of tech and data

Regulators are increasingly concerned to ensure that the pivotal role that technology and data companies play for individuals and businesses does not lead to abusive behaviour or systemic risks to markets and essential supplies. In financial services, regulators around the world will continue to extend their influence over these companies either indirectly (via stricter technology risk management and operational resilience rules on financial institutions) or directly (such as recent EU and U.S. proposals for direct enforcement powers against systemically important tech and social media companies).