In Practice
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Embedded finance: Dear CEO
In March (2023) 3 JIBFL 190, we discussed some of the challenges in providing sustainable finance products to consumers from the perspective of revenue-based finance; an embedded finance offering. Namely, there is a balance to strike between: (i) speed and automation; and (ii) positive customer outcomes. On 16 March 2023, the Financial Conduct Authority (FCA) issued a Dear CEO letter (Letter), addressed to payment firms supervised by the FCA within its payments portfolio, highlighting concerns that certain payment firms are not currently striking this balance. For embedded finance, the Letter will primarily impact providers that offer embedded banking services (if they are supervised payment firms), but it may have a wider impact across the industry.
19 March 2024Implementing the UK Wholesale Markets Review
This snapshot indicates how reforms proposed under the UK Wholesale Markets Review (WMR) will be implemented and also compares proposals with EU measures.
19 March 2024What can a borrower do when a lender fails to fund?
This In Practice article examines market standard provisions designed to mitigate the risk posed by so called “Defaulting Lenders” and explores the options for a Borrower faced with a Lender that is unable to honour its lending commitments. Capitalised terms reflect the corresponding Loan Market Association (LMA) definitions.
19 March 2024The initial margin “big bang”: the aftermath
In this article the authors consider the key issues and challenges which remain for buy-side entities following the final phase-in of initial margin requirements under EMIR and UK EMIR.
19 March 2024UK Islamic mortgages and Shariah-compliance: the imperative of eschewing legal wizardry
In this In Practice article, leading UK and international legal authority on Islamic financial law, Professor Lu’ayy Al-Rimawi explains why Islamic banks in the UK need to eschew legal wizardry and do considerably more to ensure their mortgages are cost-effective.
19 March 2024Practical implications of USD LIBOR panel cessation for “tough legacy” contracts: a brief refresher
LIBOR cessation and contract continuity may seem like “old news”. After all, most LIBOR rates ceased almost 18 months ago – and the last of the “synthetic” rates created for certain Sterling and Japanese Yen tenors will shortly expire. Nonetheless, the impending cessation of the final USD LIBOR panel rates on 30 June 2023 means that questions on legal implications are once again coming to the fore – especially given the FCA’s announced intention to create a time-limited synthetic USD LIBOR rate. This piece provides a brief Q&A refresher.
19 March 2024Embedded finance: revenue-based financing and responsible lending
The unique selling point of embedded finance is customer convenience; described by consultancy firm 11:FS as financial products offered to customers “at the point of customer need”. For small and medium-sized enterprises (SMEs), embedded lending such as revenue-based financing (RBF) provides an alternative means for funding with many benefits, including, ease of application, greater speed to funding and automated credit decisions produced using data sources and analytics. However, against the current economic outlook there is a tension between speed and robust lending practices that protect vulnerable customers, including those in financial difficulty. With the spotlight on business to consumer buy-now-pay-later (B2C BNPL) in terms of UK regulatory oversight, what steps do RBF providers need to take to deliver a responsible lending solution?
19 March 2024Capital requirements for banks holding cryptoassets: rushing towards the same direction
Existing UK and EU capital requirements on cryptoasset exposures will soon be updated to reflect the new international standard published by the Basel Committee on Banking Supervision (BCBS).
19 March 2024Embedded finance: market challenges and market changes
In September ((2022) 8 JIBFL 560) we outlined that embedded finance is the availability of financial products, integrated into a company’s infrastructure, provided by non-financial institutions (platform lenders) and capitalised by “traditional” financial institutions. One of the benefits of embedded finance is an enhanced customer experience. This customer-led approach will become more important in the current and forecast economic environment. COVID-19 drove a change in consumer habits and demands and saw record valuations for fintechs. However, as the world economy faces an increasingly challenging outlook, there has been a so-called “rebalancing” of these high valuations. In July 2022 credit card transactions by UK cardholders were up by nearly 10% on last year (UK Finance) and global e-commerce revenues are forecast to shrink for 2022. Does this signal trouble ahead for embedded finance?
19 March 2024BTI v Sequana: practical implications for directors trading in the zone of insolvency
In this article, the authors reflect on the recent Supreme Court judgment in BTI 2014 LLC v Sequana SA [2022] UKSC 112 and its practical implications for directors trading in the zone of insolvency.
19 March 2024
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