WG-REQ-1670 FIS Horizons 2025 STAGE 1 AH - copy - Flipbook - Page 10
10
Hogan Lovells
Accelerating
change and
innovation
For financial institutions, change is a constant. We are in a time
when there are unprecedented levels of change, not only in terms
of the usual churn of regulatory initiatives, but also taking us into
entirely new areas, and in some cases deregulation.
Markets themselves are changing. New products and services are being
created and rapid advances in technology are changing the landscape
fundamentally. Regulation needs to keep pace with the risks associated with
them and the possibility of harm to customers or to the financial markets.
Similarly, the demands of customers are changing, in terms of what products
and services they want (for example, the rise in buy now, pay later (BNPL)
products) and how those services are delivered (for example, increased use
of smartphones leading to growth in embedded finance).
On top of these changes, there are changes to the regulatory environment
itself. Regulators continue to grapple with the question of when and how
to effect change. As markets continue to develop, regulators will have to
ensure a balance between ensuring adequate protection and not inhibiting
innovation. A recent trend has been to withdraw from some changes that
regulators have made in the past. The EU and UK, for example, are both
retreating from the previous restrictions about how firms pay for investment
research, which was seen as putting their markets at a competitive
disadvantage. In the UK, previous restrictions regarding remuneration
and the ring-fencing of banks are being relaxed.
