Danos Group
22 Oct

The Independent has reported that four in ten UK companies will be forced to trigger their contingency plans if no clarity is given on the Brexit deal. In a survey by the Confederation of British Industry they found that 80% of companies think that Brexit has already had a negative impact on investment decisions. A reluctance to invest could have a knock-on effect for jobs, wages and living standards as less money would be available for vital public services. ‘Almost a fifth of firms have said they have already been forced to trigger contingency plans’ which includes cutting jobs, relocating production and services overseas and stockpiling goods. The EU’s chief negotiator Michel Barnier is ‘still not sure’ that a withdrawal agreement will be reached, and this uncertainty is draining investment from the UK, negatively affecting 8 in 10 businesses.


The Office of National Statistics has published a report showing that cybercrime has fallen by 30% in the past year. However, this isn’t necessarily a true reflection on the current threat that we are all faced with. ‘All other indicators are that cybercrime is on the increase’ and it is claimed that ‘fraud and computer hacking are ten times more common than burglary’. Smash and grab antics, such as billions of phishing messages, make up the majority of cyberattacks; and we all have to seriously start thinking about cybersecurity by being vigilant online, careful with what we share and avoiding clicking on unknown links, otherwise cybercrime will continue to rise.


The Financial Times has this week informed us that the Royal Bank of Scotland has set aside £2bn for small businesses due to the uncertainty around Brexit. The money is set to be used to provide trade finance, term finance and increased liquidity services for small firms that rely heavily on EU labour markets. The bank has said that they will be contacting approximately 2,000 existing RBS and NatWest customers that they think will benefit from this service. The £2bn RBS fund will be added to an existing £1bn ‘growth funding’ programme that was announced earlier in the year.


The Financial Times has also reported on a former compliance officer of UBS, Fabiana Abdel-Malek, who will stand trial for 10 counts of insider trading later this week. She is taking the stand alongside Walid Choucair whom the Financial Conduct Authority accuses of using the inside information passed to him by Fabiana to place trades in stocks, resulting in a profit of over £1m. Both defendants deny the charges and could be facing a maximum seven-year jail sentence.

In the UK’s financial market, suspicious trades have reached their highest level in eight years, and the FCA is currently investigating 87 live cases. An unfavourable comparison with the United States, who’s main securities regulator raised only 41 insider-trading cases last year.



‘Gender inequity in the financial services industry is so severe that nearly nine in 10 women expect tending to family obligations will hurt them career wise’, reports the Payment Source. From a survey conducted by Visa and Money2020, there was an overall finding that men are more likely to have an ‘outsized positive view on progress in gender inclusion’. An example of this being that 68% of men predict the number of women in senior levels will increase over the next few years, but only 45% of women have agreed with this. It was also found that only 62% of the female respondents would feel welcomed back into their role after maternity leave, and that only 28% said they feel that men and women are equally paid for the same job in their company.

‘The survey showed a persistent gap in the perception of inclusiveness within companies and the pace of change’, despite a large amount of research showing that more diverse companies perform better. This survey is anticipated to be completed annually in order to track whether the industry’s talk of change is resulting in a more inclusive environment.


LATTICE80 has announced the expansion of its Fintech Hub to Hong Kong and it will also host the Blockchain Accelerator Program to support the United Nations’ 17 Sustainable Development Goals (SGDs). The company is the world’s largest fintech hub which connects Fintech Startups, Financial Institutions & Corporates, Government Institutions and the Public. Joe Seunghyun, Co-founder and Founding CEO of the company commented ‘We believe Hong Kong is the right place to be a connection point for Belt and Road Initiative. Hong Kong, being a traditional financial and trading hub to connect Asia and Europe, has the world’s best exit market and access to global investors that budding fintech and blockchain startups would look for’.


David Wagner at Forbes has this week reported on how LinkedIn accounts could threaten company’s compliance strategies. As even larger amounts of information are being inputted into LinkedIn, some of which falls under current or upcoming regulations, companies should be managing their accounts to ensure that this asset does not become a liability. LinkedIn now contains ‘reams of potentially sensitive and regulated information’ that should be preserved in an archive for both legal and compliance reasons. Company’s should look for strategies that make their compliance more efficient, while encouraging employees to continue using LinkedIn, instead of putting strict limits on its use. ‘Better compliance management isn’t only about appeasing regulators; it’s about keeping costs in check, ensuring operational efficiency and maximising the value of all communications’.


Microsoft has announced plans to sell artificial intelligence and other technology to the US Military. City A.M. reported that the race between the US and China to build next-generation security technology has sparked the debate about AI use in the military. The CEO of Amazon has also shown his support for the US military and his company are the favourites for a cloud computing contract with the Pentagon, alongside Microsoft. A number of people are however opposed to tech companies having an involvement in the military and federal law enforcement.


The Irish Times has reported on low levels of diversity being a major problem with banks and other financial services firms. A lack of diversity among key decision makers and at senior levels creates risks and inhibits necessary culture change. When similar people in similar situations are given similar information, they are likely to make very similar decision and this type of ‘groupthink contributed to the depth of the financial crisis’ as well as the many conduct scandals that followed. Gender diversity is only one aspect of diversity but remains a very important one. Women are seriously under-represented at senior levels across all financial services, and at the end of 2017 men had been appointed nine out of 10 of these influential positions. ‘The financial services industry needs to be in a position to attract, retain and harness the talent and contributions from the broadest possible range of staff to innovate and compete’.

16 Oct

The Times of India has reported on a rise in job frauds that has led to police requesting job portals to display a disclaimer at the bottom of their homepage, warning people about such frauds. S Harinath, assistant commissioner of Police (Cyber Crime), Rachakonda, has said that ‘Most of the big firms post vacancies on their websites. Jobseekers should not believe what the caller is saying and check with the company HR’. These fraudsters rent a small place and hire people to go through various job portals, they extract the contact details of jobseekers and later send them fake emails ‘offering’ them jobs. From examples, a consistent trait of these frauds seems to be asking for money for a phone interview, one victim is reported to have lost Rs 5.5 lakh which equates to roughly £5,600.


Similarly, the Irish Independent have reported that cyber criminals are using social media to hack into bank accounts. According to the head of the Garda National Cyber Crime Bureau, ‘criminals are using social media to check when customers are contacting banks about problems, and then posing as the bank in order to hack into people’s data’. De Supt Michael Gubbins is expecting that cybercrimes will become increasingly hard to detect in the coming years, an example could be due to the increase in use of fileless malware, that sits on the computer’s RAM making it harder to detect. Also, the increasing usage of cryptocurrencies has seen a new type of cybercrime emerge in the form of ‘crypto-jacking’, whereby hackers infiltrate a computer and use it to attempt to steal the user’s digital currency. As a result of this, De Supt Gubbins is urging people to make sure they stress-test their cyber-security systems on a regular basis.


This week the journal Asia Asset Management informed us that the ‘Regulators in Singapore and Indonesia have signed a memorandum of understanding that is aimed at sharing trends in financial technology and fostering innovation in financial services’. They are also set to create a framework in order to help fintech firms better understand the regulatory regime and opportunities available in each jurisdiction. This pact will promote joint innovation between both countries and also give the Southeast Asian neighbours an opportunity to learn and collaborate on building the ‘future of finance’.


Alliance News has reported of the disruption likely to be caused by a no-deal Brexit and that a ‘failure to reach a withdrawal agreement could impact on trillions of pounds of financial contracts between the UK and EU’. One of the main concerns is what would happen to the continuity of cross-border financial contracts between the UK and EU as the majority of these are incredibly important insurance and derivatives risk management tools. Conor Lawlor in response to this has said that a lot of these contracts will not fall away because they are essentially still based on commercial or corporate law and that intervening in those contracts is difficult to do as it would be considered a regulated activity. The best case scenario would be increased costs, however, at the worst case it would mean that businesses can’t function because the counter-party cannot intervene and make the contract work as it should.

Another concern of a worst-case scenario no-deal Brexit is that paying out some pensions could become illegal. The Association of British Insurers has warned that a ‘no-deal scenario would leave insurance contracts in ‘legal limbo’, with firms unsure if they could legally pay claims for contracts drawn up before Brexit, which would be paid out in EU countries’. This issue could affect pensioners living in countries with insurance-based pensions.


The Guardian reported this week that the use of Artificial Intelligence within the company Amazon has been scrapped, due to the results of selecting workers based on their CV’s consistently discriminating against women. This decision has highlighted an important factor about machine learning being that no matter how fast they learn, they can only learn from the data presented to them, and if this reflects historic patters of discrimination then the results with perpetuate this. The program at Amazon was taught to discriminate against women from the records of job applicants that had been previously hired; ‘the machine behaved as though being female were a sign on inferiority, just as the industry it learned from had done.’ Machine learning and the use of AI can expose prejudices embedded in our use of language that we may not have noticed before. Therefore, it is essential that moral and legal responsibility be attached to the human parts of the system and that the companies, people and government be held accountable for the consequences of its use.


Smart Brief has described the challenges faced in fintech regulation and reported on the discussed topics of the Fintech Ideas Festival Policy Series in Washington, D.C.

Craig Phillips, counsellor to the secretary of treasury has said that there has been an ‘increasing number of nonbank financial institutions since 2008, and he thinks innovation will continue to accelerate’. Paul Watkins, head of Consumer Financial Protection Bureau’s Office of Innovation explained that they are revising their trial disclosure program in order to encourage disclosure. ‘Groups will be able to apply for trial disclosure so that multiple companies can share initial costs’, and in order to keep federal regulations from hindering state efforts to promote innovation, there will be an involvement of state senators to fast track federal approval for organisations that are already approved through state programs.

Innovation in financial technology is an important goal for the US but regulatory uncertainty is currently a considerable challenge for fintechs. OnDeck’s Christian Spradley added that ‘there’s an educational gap between what fintechs can do and what regulators understand’ which causes frustration on both sides. An easy to understand source of information has been called for by FS Vector’s John Collins, as well as an open dialogue between all parties to create a ‘culture of compliance’.


The Insurance Journal has reported that London is still attracting financial services investments despite the cloud of Brexit. Last year London secured 55 inbound foreign investment projects, almost double the amount than Dublin, Paris, Frankfurt and New York. Catherine McGuiness, city of London policy chair, has said that ‘The UK leads the world when it comes to exporting financial services and we have a number of strengths that appeal to investors’. However, the foreign investment flow can quickly shift so it is important to secure a positive Brexit deal in order to provide confidence for the sector. To date, the tally of financial jobs that have moved to new EU Brexit hubs from London has been much lower than initially expected after Britain voted to leave in 2016.


RANE has announced the results of the 2018 RANE Compliance Survey this week, it was designed to ‘gauge perceptions of how important specific compliance and culture elements are to developing an effective compliance program, and measure how well their companies are aligning themselves to these rankings’. The results of the survey show a divide between what companies perceive to be important and how they rate their corporate culture on these factors. Each factor in the survey received a higher average importance score compared to the average rating assigned by respondents and the biggest difference was the importance of corporate culture and its effectiveness in practice. Serina Vash, Executive Director GRC at RANE commented on the findings of the survey and said that it ‘highlights that leadership integrity is a key factor in both creating a positive corporate culture and contributing to an effective compliance program’. A lack of confidence in leadership and management matters can pose significant operational, reputational, financial and human resource risk.


International Investment has reported that over two million Hongkongers have been affected by cybercrime this year, and that the number of fraudulent banking websites in Hong Kong has seen a rapid increase. In August this year there were 15 reports of cybercrime incidents, compared to only two cases in the same month a year ago. Police figures also show that in the first year such offences started to be tracked (2005), 653 cases were recorded, this number skyrocketed to 5,939 in 2016, with HK$2.3bn lost that year.

Hong Kong’s rate of cybercrime was higher than Japan (18%) and Singapore’s (33%) last year; and at least 2 million internet users were a victim of cybercrime, losing $28 on average and spending 19 hours trying to fix the problem.


Binance has signed a deal with AML compliance firm Chainalysis, to better ensure meeting anti-money laundering and know-your-customer requirements. Coin Geek reports that Chainalysis expects many other cryptocurrencies to follow in Binances footsteps to build a world-class AML compliance program that both builds trust with major financial institutions and satisfies global regulators. They also claim that their software (Chanalysis KYT), which works by ‘pattern recognition, proprietary algorithms and millions of open source references to identify and categorize thousands of cryptocurrency services to raise live alerts on transactions involved in suspicious activity’, is the only real-time transaction monitoring solution for cryptocurrencies. The company has over 150 worldwide clients including global law enforcement agencies and regulators.

08 Oct

Barron’s magazine reported on three key numbers to know about gender in the financial services. A study conducted by Morgan Stanley revealed that men and women are evenly represented in the financial services industry; however, a 2018 McKinsey study also showed that only 19% of the executive level roles are filled by women. It is predicted that if the current promotion and exit rates of women continue then it will take until 2048 for financial services companies to reach 30% women executive representation. This could however be bad for business, as research shows that companies that have a higher number of women on their executive teams were more likely to make more money and value.

The Business Times stated that UK fund managers probably won’t need to relocate after Brexit. The threat of relocation in order to manage EU investments funds after Brexit is now receding, says the head of the country’s Investment Association (IA). Steven Maijoor (ESMA’s chair) said that EU and UK regulators will sign cooperation agreements or memorandums of understanding to supervise cross-border financial activity, this is seen as aiding the continuation of delegation by the IA.

Fund managers have been concerned that after Brexit they may no longer be able to manage funds listed in the EU under delegation; this concern was due to the mixed messages from last summer, although these now seem to have been clarified by ESMA.

This week, The Star reported that Singapore is going to help crypto firms set up local bank accounts. Singapore’s financial recruiter is willing to help cryptocurrency firms having problems setting up local bank accounts; some crypto firms have previously complained that they cannot open local bank accounts, or that their accounts have been closed, due to a regulatory vacuum that hinders their operations in Singapore.

However, Monetary Authority of Singapore Managing Director Ravi Menon has warned that many aspects of the crypto industry remain obscure and dangerous for investors, and that his main concern when regulating the sector are to ensure consumer protection and to prevent money laundering.