Fintech Law is the branch of law concerned with Financial Technology (Fintech).
Fintech is a rapidly growing industry, that is fundamentally changing the structure of the financial system, the business models of participants in the financial system (such as commercial banks, central banks and insurance companies) and the options available to individual and corporate customers of the financial system.
Categorisations within fintech – and so areas that fintech law covers – include:
- Traditional Banking functions – including payments, savings, mortgages, consumer lending, corporate lending,
- Investment advice.
- Brokerage – for equities, fixed income and other assets.
- Money issuance – including cryptocurrencies.
- Capital markets – including securities exchanges and peer-to-peer investments.
- Financial operations – including data, security and analysis.
Involved in the development and use of fintech law are:
- Regulators – who update financial regulations to adapt to new financial technologies.
- Fintech start-ups – new firms (often venture capital funded) that develop and/or implement new financial technologies – often in competition with traditional financial services firms.
- Banks, insurance companies and other established financial institutions – who can work to adapt to new financial technologies and/or to protect their businesses and shareholders through commercial activities and lobbying.
- Fintech investors – including venture capital firms, established financial institutions, individuals and others.
- Fintech lawyers – who advise each of the above groups.
Legal issues faced by fintech firms and other participants in the fintech industry include:
- Financial regulation – understanding license requirements, applying for licenses, complying with ongoing regulatory requirements once operational.
- Corporate matters – such as client contracts, partnerships, employment.
- Data compliance – meeting data protection and gathering laws.
- Intellectual property – protecting financial technology developed or acquired, protecting trade secrets.
- Financing – raising finance – angel, venture capital, debt, raising capital from the public through IPOs, coin offerings (ICOs).
- M&A – buying or selling parts or all of a fintech business.
The fintech industry is developing quickly, and fintech law is arguably developing even faster at the moment as it catches up with the technological advances have arisen over recent years.
Financial regulators around the world are in general moving in a similar direction – enabling their populations to benefit from these newly developed technologies, while protecting their financial systems and individual consumers from risks that some technological developments can bring if not regulated.
Read about individual topics within fintech law in the Need to Know section.
Keep up to date with developments as they happen in the Fintech News section.