Global law firm K&L Gates, in partnership with Forbes Insights, has released their ‘Financial Services at the Crossroads of Digital Transformation’ report, with key findings measuring the extent of fintech and regulatory change in financial services.

Disruptive technologies

The dramatic transformation of financial services by fintech is evidenced by 82 percent of respondents noting 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. The impact of changing global government regulations as an important trend affecting the industry is evidenced by 62 percent of executives citing 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.

General counsel impact

Michael Caccese, chairman of K&L Gates’ management committee and a leader of the firm’s financial services practice, said ‘the financial services industry has experienced a great deal of technological and regulatory change in recent years. This report is a valuable resource for our clients and others in the industry in understanding and responding to those changes.’ 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.