PSD2 finalised standard on SCA and CSC: the wait is over, but questions remain

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Twenty months after the European Banking Authority (EBA) issued the first draft, on 13 March the regulatory technical standard (RTS) on strong customer authentication (SCA) and Common Secure Communication (CSC) under revised Payment Services Directive (PSD2) was finally published in the Official Journal of the European Union.

The length of the process and the number of iterations required to finalise the standard evidence the complexity of developing rules to establish a level playing field between different market participants, while at the same time ensuring technological neutrality, consumer protection, and enhanced security in payments services.

The finalisation of the RTS is an important milestone which will give firms much more clarity and certainty on how to push forward their PSD2 compliance and strategic programmes. Nevertheless, the final RTS still leaves a number of important questions open, particularly in relation to the development and testing of access interfaces for Third Party Providers (TPPs).

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Posted on 27/03/2018 | 0 Comments

Basel III: the bank capital marathon

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The final parts of Basel III, agreed in December 2017, were widely greeted in the banking industry as having a less severe impact than initially feared. Many commentators also noted that the January 2022 implementation date set for these reforms was sufficiently far away to dampen much of their immediate effect on banks. If this assessment holds true, it could limit the need for banks to raise large amounts of fresh capital and help them focus on new business opportunities, controlling costs, and delivering greater shareholder returns.

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Posted on 26/03/2018 | 0 Comments

The Power of Cloud

Cloud

Cloud Services Integration

Cloud integration is one of the core IT initiatives of the Insurance Industry. Integrated cloud solutions allow for better information, more effective assessments and faster innovation. By reducing the amount of capital and time it takes to enter or expand into new market, start-up or established companies can do so faster and with less risk.

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Posted on 23/03/2018 | 0 Comments

Equity release: the FCA’s scrutiny is set to increase further

Keys circular

In this blog we explore how the FCA’s frequently-articulated policy priorities on the ageing population and vulnerable consumers, product complexity, and retirement advice may shape future FCA work on equity release. We also consider how advisors and product manufacturers and lenders can best respond to this increased scrutiny.

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Posted on 15/03/2018 | 0 Comments

Generation Game – winning tomorrow’s high net worths

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In 1957 British Prime Minister, Harold Macmillan, made an rousing speech declaring that "most of our people have never had it so good"1. The phrase went down in history and people born at the time – the Baby Boomer generation – went on to be far better off than their parents.

But the trend didn’t last. It’s not clear when or exactly why this happened but, as Deloitte’s Chief Economist, Ian Stewart, explains here, we do know that on average older people in Britain have done better than the young in terms of wealth, incomes and benefits in the last decade or so.

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Posted on 09/03/2018 | 0 Comments

The EU’s FinTech Action Plan: charting the way forward

Fintech

The European Commission’s FinTech Action Plan, published today, represents a significant milestone in the development of EU financial services (FS) policy. It gives the strongest indication yet that technological innovation and disruption will be among the main drivers of the EU’s future FS policy agenda, particularly after the next Commission takes office in 2019.

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Posted on 08/03/2018 | 0 Comments

IFRS 9 Methodology Arbitrage

Arbitrage

Introduction

Our previous article “IFRS 9: What to expect of an expectation” generated significantly more interest and feedback than usual. In this article we explore some of the common themes from respondents’ correspondence, and explore whether firms’ methodological choices lead to arbitrage opportunities in the market.

We would like to first extend our thanks to everyone who took the time to send their comments (publicly as well as privately). Correspondence focused on three important themes, which we discuss below:

  • Scenario Design;
  • How to estimate probabilities of loss data points; and
  • The principle of parsimony;

We then explore whether firms’ methodological choices lead to arbitrage opportunities for market participants.

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Posted on 08/03/2018 | 1 Comments

EU Commission notice on the withdrawal of the UK and EU rules in the field of asset management

Brexit

On 8 February 2018 the EU Commission released a number of “Notices to Stakeholders” in relation to Brexit. These notices covered a wide range of sectors, including investment managers and MiFID firms, both of which will be of interest to asset managers in the EU.

In this blog, we highlight some of the potential implications of these notices for both UK and EU27 asset managers and areas that firms should be considering as part of their Brexit planning.

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Posted on 07/03/2018 | 0 Comments

IFRS 9: What to expect of an expectation?

IFRS1

Introduction

The IFRS 9 standard requires firms to quantify expectations of lifetime default risk and Expected Credit Losses (ECL) for certain financial instruments. The standard recognises that future losses are uncertain and asks firms to evaluate a range of possible outcomes to arrive at an estimate of expected loss that is “unbiased and probability-weighted” (paragraph 5.5.17).

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Posted on 23/02/2018 | 1 Comments

ESRB Recommendation on liquidity and leverage risks in investment funds

ESRB Recommendation on liquidity

The European Systemic Risk Board (ESRB) has published a Recommendation on liquidity and leverage risks in investment funds. This topic has received significant attention from international bodies due to concerns about systemic risk. In 2017 the Financial Stability Board (FSB) published its Policy Recommendations to Address Structural Vulnerabilities from Asset Management Activities (see our blog). The International Organization of Securities Commissions (IOSCO) has recently updated its Recommendations for Liquidity Risk Management for Collective Investment Schemes (see our blog) and is due to make recommendations on fund leverage measures later in 2018.

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Posted on 23/02/2018 | 0 Comments