Page 25 - May 2018 Disruption Report Flip Book

REGULATORY MOAT JANMUAAYRY20128018
United Kingdom – Bitcoin is currently classified as a private currency. In Dec. 2017, FCA said in a press release that it is monitoring DLT-related market developments and keeping its rules and guidance under review. (Bank of the Future, Citi GPS, March 2018)
How will EU’s General Protection Regulation impact competition in the financial service industry?
On May 25, EU companies and companies doing business in the Eurozone can no longer collect and use personal data without their customer’s consent under the General Data Protection Regulation (GDPR). Calling the 260-page GDPR “ambitious, well-intentioned and largely wrongheaded,” Bloomberg notes that multinationals will spend $7.8 billion in simply preparing to comply with the new rule. Bloomberg’s editorial board wrote:
Failure to comply could result in fines up to 4% of global revenue. ... Surely Facebook and Google can afford such costs, you might say. Yet, this too
is a problem: The GDPR is likely to advantage big tech companies at the expense of smaller ones. Few small businesses will be able to fully comply with these rules, while many of them will suffer from having less effective advertising. Europe’s dearth of notable startups will hardly improve.
Worse, the rules could impede innovation. Many blockchain companies could be shut out entirely. Cloud computing may become substantially more complicated. Systems that rely on artificial intelligence could in many cases be incompatible with the GDPR’s mandates.
... As Europe leaps into the unknown on this issue, it must be alert to the many downsides of its approach, and prepared to rethink things that aren’t working. If it is, it could help the rest of the world think more clearly about a defining problem of the information age. (Bloomberg, 05/08/18; Tearsheet. com, Suman Bhattacharyya, 04/16/18)
In Bank of the Future, Citi GPS analysts wrote:
...Regulators are also increasingly focusing on data quality and utilization. For example, in order to ensure better compliance with [Know Your Customer] and [Anti-Money Laundering] rules, regulators in multiple jurisdictions have pushed banks to “clean up” their customer
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