Posts

Norton Rose Fulbright publishes COVID-19 report

A new report by global law firm Norton Rose Fulbright – “Global operational resilience and COVID-19” – reveals how international financial institutions are managing operational resilience in the wake of the COVID-19 pandemic.

A cross-section of senior executives and risk and compliance professionals from more than 50 international financial institutions responded to the survey, which focuses on seven headline areas:

  • Governance and oversight
  • Annual budgeting
  • People and important business services
  • Outsourcing and systems
  • Regulatory change and guidance
  • Key challenges and concerns
  • Lessons learned

Whilst 38% of respondents felt their institution had moderately comprehensive operational resilience frameworks before the pandemic, the same proportion confirmed their framework was either “in development” or “in place but required improvement”. Consequentially, the pandemic has prompted a robust response from the financial services industry with 80% of respondents stating that their institutions now has enhanced governance and oversight due to the crisis.

Managing external stakeholders and third parties, IT connectivity, business travel disruptions, and supervision and oversight were four areas in which respondents had experienced challenges during the earlier phase of the pandemic.

In addition, respondents have identified conduct risk, cyber and data security, cash flow and profitability, and the impact of loan loss provisions as primary areas of systemic concern.

Correspondingly, respondents expect greater regulatory scrutiny and enforcement action to focus on controls and risk management frameworks, technology and management information, accountability regimes and financial crime risks.

Given the ongoing disruption caused by the pandemic, more than 70% of respondents expect that their organisations will increase their operational resilience budgets in 2021.

Lisa Lee Lewis, head of advisory for risk consulting at Norton Rose Fulbright, commented: “The pandemic has prompted an institutional rethink on operational resilience. The question financial institutions need to ask themselves is: can the institution absorb operational shock when they do occur while continuing to provide the same level of services to its customers and relevant markets? Financial institutions will continually need to test their ability to remain within their impact tolerances through a range of severe but plausible disruption scenarios. These areas will be even more pertinent as and when new or enhanced rules come into force over the course of the year in countries across the globe.”

Jonathan Herbst, global head of financial services, Norton Rose Fulbright commented: “The current pandemic has meant that firms’ contingency plans are being tested in real-time. It has incidentally prompted firms around the world to begin mapping, testing and strengthening their operational resilience frameworks, often in advance of the new or revised rules coming into force. Those firms who have generally responded well in this crisis will find that the initial groundwork for operational resilience has been laid.”

Norton Rose Fulbright launches global payments practice

Global law firm Norton Rose Fulbright has launched a global payments practice to assist businesses around the world in navigating this complex and rapidly developing area.

The multidisciplinary group advises clients in the payments industry in relation to a wide range of matters, including investment activity, new product development, regulatory compliance, privacy and data protection issues, disputes, and the outsourcing of payment technology. The team provides an integrated service across the firm’s practice areas, including corporate/M&A; financial services regulation; risk advisory; data protection, privacy and cybersecurity; intellectual property; antitrust and competition; outsourcing, and dispute resolution.

The team’s clients span the range of market participants, and include banks, non-bank financial institutions, payments providers, technology companies, start-ups, institutional investors, and governmental and regulatory bodies. The practice, which comprises of over 50 lawyers, consultants, risk advisory specialists and government relations professionals will be led by a team of partners from across the firm’s spread of offices.

Norton Rose Fulbright global head of financial services regulation Jonathan Herbst commented: “We have long advised clients in relation to the payments sector and with this new practice, we draw together our corporate, regulatory and disputes experience from across the globe to provide an enhanced service to this fast-growing industry.”

Norton Rose Fulbright FinTech partner Victoria Birch commented: “Payments technology underpins global digital commerce. Major institutions, companies and start-ups in both mature and emerging markets are investing heavily in this space. Our breadth of experience makes our global payments practice ideally placed to help clients navigate the opportunities and challenges presented by this growth.”

Recent matters the global payments practice have advised on include:

  • Advising the UK New Payment System Operator on its acquisition of the Bacs, Faster Payments and Cheque and Credit Clearing Company payment schemes
  • Advising eight leading international banks on their PSD 2 implementation projects
  • Advising Helios Investment Partners on its acquisition of a majority stake in Egypt’s TPAY Mobile
  • Advising AnaCap Financial Partners on the acquisition of Hamburg-based StarTec Payment & Service GmbH

If you would like to find out more information, please visit: https://www.nortonrosefulbright.com/