- Global law firm K&L Gates LLP
, in partnership with Forbes Insights, has released a report examining the impact that technological disruption and a shifting regulatory environment have had on the financial services industry and how executives and legal counsel are responding to rapid change in the marketplace as a result of these and other key trends.
The report, Financial Services at the Crossroads of Digital Transformation
, is based upon extensive research collected from a survey of 200 U.S.-based financial services and legal executives, and also looks at how organizations plan to address these changes in the near future and how these changes are redefining financial and legal roles.
Exclusive key findings from the report include:
• FinTech has dramatically transformed financial services
. Eighty-two percent of respondents noted that FinTech has significantly or very significantly impacted their business model.
• The impact of disruptive technologies such as artificial intelligence, blockchain, analytics, and data capture is on the minds of executives
. When asked to identify the most important trends affecting their organization over the next three years, more than two-thirds of respondents cited factors relating to technological disruption, such as cryptocurrencies, FinTech, digital transformation, omni-channel customer experiences, and competition from non-financial companies.
• Changing global government regulations are an important trend affecting the industry
. Sixty-two percent of executives cited a stringent regulatory environment, including GDPR, as the most important trend affecting the industry. Data-related issues, including cybersecurity and privacy, are the biggest area of legal risk facing the financial services industry, with more than two-thirds of respondents citing “dealing with data” as an issue presenting the most potential for legal risks.
• Technological and regulatory challenges are demanding new skills from legal and business executives
. Second only to knowledge of regulatory compliance, more than half of executives cited data protection and privacy expertise as the most valued skill needed over the next three years, with knowledge of payment systems ranking alongside more traditional areas such as consumer class actions and fraud prevention.
• The role of general counsel is changing, according to nearly all survey respondents
. It has become broader, more demanding, and gained in significance due to the intense regulatory environment. Further, almost 90 percent of respondents believe that legal risks are factored into decisions about growth strategies and think that management’s concern about legal issues has increased significantly over the last three years.
“The financial services industry has experienced a great deal of technological and regulatory change in recent years,” said Michael Caccese, chairman of K&L Gates’ management committee and a leader of the firm’s financial services practice. “This report is a valuable resource for our clients and others in the industry in understanding and responding to those changes.”
K&L Gates’ financial services practice cuts across the many disciplines requiring highly specialized knowledge and experience to address governmental regulation and to form a comprehensive understanding of the global financial markets. Lawyers within the practice represent a large majority of financial institutions and securities and asset management firms in a variety of disciplines throughout key financial centers across the globe.
Lawyers in K&LGates’ FinTech practice are part of a cross-disciplinary, global team focused on helping clients navigate regulatory, policy, and business issues surrounding the FinTech space, such as consumer financial services regulation, e-commerce regulation, fund formation, cybersecurity, corporate, finance, and intellectual property matters. Click here to download
the full K&L Gates/Forbes Insights report Financial Services at the Crossroads of Digital Transformation.