Finance
How technology can help asset managers amid the FCA’s social media crackdown
Published
3 weeks agoon
By
admin
Blair McPherson, Managing Director, Profilir Ltd. (an Apex Group company)
As part of the UK Financial Conduct Authority’s (“FCA”) renewed commitment to protecting consumers and investors as part of Consumer Duty, the regulator this week concluded a consultation on how its financial promotion requirements can and should apply to social media. The FCA plans to review the responses to the consultation and publish a final guidance later in 2023.
The FCA aims to ensure that all financial promotions should be fair, clear and not misleading by implementing platform-neutral rules which apply across all channels used to advertise financial products, including social media. This can be difficult on social media, where people from across the world, with varying levels of financial knowledge and understanding, meet on one forum where communication is necessarily truncated.
So far, much commentary has focussed on what this means for ‘finfluencers’, celebrities or other individuals with a large social media followings who promote a regulated financial product or service. This has followed significant noise around the suitability of influencers promoting high risk investments such as crypto to a large audience of often young or inexperienced investors. While this guidance is aimed at protecting retail investors, regulated institutional investors are also pulled into scope.
So what could this new guidance mean for institutional investors who are using social media platforms such as LinkedIn or X (formerly known as Twitter) as channels to provide content to potential investors?

Blair McPherson
Asset managers, and specifically funds such as private equity and hedge funds are only permitted to market to qualified, professional investors, and are increasingly finding that social media platforms, while having a large audience, are unsuited for financial promotion, specifically funds.
Asset managers currently tend to use LinkedIn and X to raise brand awareness across their broad user base, but are not able to use the platforms to post fund marketing content nor interact with prospective investors as they cannot verify their location and investor status. Indeed, some are currently teetering on the grey area around what is compliant, sharing thought leadership and fund information – the grey area which the FCA’s consultation is seeking to illuminate. As such, institutional investors have found that due to the existing regulatory rules on investor targeting by type and jurisdiction, that current social media platforms are not fit for their purpose.
The FCA may find that putting the genie back in the social media bottle to be a challenging task. Indeed, instead of the existing social media platforms available, institutional investors are crying out for a tech solution which offers the same accessible interface and ease of user experience, while allowing them to target specific investor audiences.
These current social media platforms are not fit for the purposes of asset managers, who require a closed access, invite only platform. This could be either a standalone or white label product that would allow asset managers to share fund marketing collateral and media with relevant audiences. An asset manager could post a call to action on an existing social platform such as LinkedIn and/or X (formerly Twitter) encouraging interested parties to register on this controlled platform or on a white label platform for more information. This step would take less than a minute and be free for investors, allowing managers to control who has access to fund related content and meet compliance requirements.
Such a solution would look like familiar social media, but crucially would require investors, upon registration, to self-declare their investor type and what country they are in, this information could then be verified through supporting document upload. This means that investors would automatically be restricted to only having access to Asset Manager marketing which is compatible with their investor type and jurisdiction. It would also allow asset managers to actively control and filter the investors which can access their content.
This would remove a whole host of compliance-related headaches, giving the Asset Manager complete control and the ability to remove access at any time for investors that are registered on the platform. The multi-user access enables an Asset Managers’ compliance team to have access and stores all interactions in an archive for up to seven years.
The FCA is not alone in seeking to scrutinise promotion of financial products on social media platforms, and we expect many global regulators to announce similar plans in the coming months. As is often the case, fintech problems require fintech solutions. New technology is needed to enable controlled and compliant distribution of fund information to qualified investors.
As asset classes such as private equity become more ‘democratised’ and open up to a larger number of smaller investors, having the technology to deliver compliant, and fit for purpose digital marketing channels will become more essential than ever.
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Finance
How technology can help win the war on financial crime
Published
1 day agoon
December 2, 2023By
admin
By Andrew Doyle, CEO of AML compliance software, NorthRow
Financial crime is on the rise and the stats are alarming. In the UK alone, 64 percent of businesses (according to data from the Global Economic Crime Survey) have experienced fraud, corruption or other incidents of financial crime within the last 24 months, while ONS stats show there were 3.7 million incidents of fraud in England and Wales in the year ending December 2022.
So it’s no surprise that financial institutions and other regulated firms are under increasing pressure from regulators (and the ever-evolving legislation they must adhere to) in the battle against dirty money. Regulators are imposing crippling fines for any compliance breaches, not to mention the significant reputational damage that comes with non-compliance.
Historically, financial firms have employed large numbers of staff to combat money laundering, but regulators are now expecting to see digital solutions in place to counter the risk of financial fraud, and with good reason. Technology can be the deciding factor in the war on financial crime and here’s why:
Better risk detection
Technology platforms can analyse historical data to predict potential incidents of money laundering, enabling organisations to take preventive measures, while also identifying unusual patterns or changes in customer risk profiles, which may also indicate suspicious activity.
Advanced analytics can help companies identify complex patterns across large datasets, making it easier to detect networks of fraud. It is also possible to assign risk scores to transactions or entities based on their likelihood of being associated with money laundering. This helps in prioritising high-risk cases for investigation.

Andrew Doyle
Enhanced customer due diligence
Automated software platforms can analyse customer information, public records, and other data sources to perform thorough due diligence on clients, identifying potential risks or suspicious behaviour before they are signed up.
RegTech automates the process of verifying customer identities and conducting enhanced due diligence on individuals and on companies, ensuring compliance with Know Your Customer (KYC) and Know Your Business (KYB) regulations, both vital components of anti-money laundering efforts.
More accurate identity verification
Biometric verification is a powerful tool in enhancing anti-money laundering and fraud detection. It involves using unique physical or behavioural characteristics of an individual to verify their identity. Traits like fingerprints, facial features, iris patterns, and voiceprints are unique to each individual and are nearly impossible to replicate or forge. This makes them highly reliable for verifying that clients are who they say they are.
Biometric verification can also reduce the number of false positives in fraud detection by providing a highly accurate means of confirming the identity of a customer. This leads to more reliable results and lessens the need for manual intervention.
Continuous and real-time monitoring
Real-time alerts allow for immediate action when suspicious activity is detected. This can prevent or minimise potential financial losses and damage to a company’s reputation. By identifying and acting upon suspicious activities in real-time, financial institutions can reduce the risk of financial losses associated with incidents of economic crime.
Continuous monitoring with real-time alerts can also help refine the accuracy of anti-money laundering systems over time. This reduces the number of false alerts and decreases the need for manual intervention.
To the future
According to data from Capgemini, 68 percent of UK institutions are already looking into real-time anti money laundering monitoring systems to stay ahead of potential threats while 86 percent, says Refinitiv, agree that innovative digital technologies have helped them identify financial crime.
So the data tells us that companies are already heading in the right direction when it comes to fighting fraud, but as the landscape of financial crime continues to evolve, financial firms must ensure they do the same.
By leveraging the right technology, businesses can ensure they not only meet regulatory requirements and safeguard their operations, but also protect their reputations and crucially, maintain that all important customer trust.
Finance
In 2024, payments will evolve to broaden accessibility
Published
2 days agoon
December 1, 2023By
admin
Attributed to Roy Aston, COO at Paysafe.
As we look to 2024 and beyond, businesses will need to adapt experiences to changing consumer needs and demands, working with payments providers to increase accessibility, offer broader choice, and more.
We break down some the forces driving evolution in payments over the coming years.
Payments need to be available to everyone, everywhere
Regardless of their location or situation, consumers do not want to wait when it comes to payments. The proliferation of smart devices has given users access to everything, all at once, and this is also expected when making transactions.
In 2024, banks and financial institutions will continue to push ahead with this journey to offer smooth, secure payments to everyone, everywhere, delivering services at the lowest possible barrier to entry. This also means ensuring consumers, even those that are unbanked or underbanked, have access to remittances and cross-border payments.
The first step in achieving this goal will be to improve reliability, security and availability, which may see traditional payment methods like debit and credit cards – still the most popular payment methods – become less dominant, while alternative payment methods (APM) like eCash and digital wallets will grow.
This is because, with the right payment provider, merchants can ensure these APMs are available anywhere in the world – eCash, for example, does not require a bank account to use. In addition, digital wallets and online cash can offer swift, secure transactions, helping users overcome security issues by not requiring them to enter their financial details.
Financial companies will embrace collaboration in 2024
While businesses can address consumer payment concerns using APMs, they must also look to bolster their own defences as the threat landscape changes. Increasingly advanced technology, like AI models, are now accessible to far more people, including threat actors.
To combat this escalating threat, it’ll be no surprise to see more financial companies collaborate in 2024 as they seek to improve cyber risk mitigation. This makes perfect sense – and would be a positive step for the industry – though it is easier said than done.
Businesses must share data legally, while aimed toward a positive purpose, rather than for pure profit. For example, if a financial organisation gains intelligence on a cyber group, they could share this with other companies to protect against bad money movement.
Ideally, collaboration could help improve anti-fraud, anti-money laundering, and cyber security measures, and more broadly reduce risk for businesses and consumers alike. But first, thinking around data governance may need to change.
Existing trends will evolve
While exciting new trends will emerge in 2024, we’ll also see the evolution of some that have yet to reach their full potential.
Embedded payments, for example, will continue to develop, with more businesses bringing together financial products with features like loyalty schemes to offer more added value to consumers.
Decentralised finance, too, should continue to build momentum in 2024. While decentralised finance, and specifically NFTs, have faced challenges this past year, it will be no surprise to see companies get to grips with changing regulatory requirements and continue to build in this area.
Open banking could also see a big 2024, with more APIs becoming available, and companies starting to develop new solutions to enhance customer experience and reduce friction in the payment ecosystem.
And while evolution rather than revolution is a necessity in technology, it’s always exciting to look ahead to the big trends that could shape the future – perhaps not in the year ahead, but beyond.
The future is quantum
Quantum computing is a trend that is as exciting as it is potentially frightening. Able to perform computations that are exponentially faster than ever before, quantum computing represents a new frontier and it will be thrilling to see how it is used in the years ahead.
Combined with AI, for example, quantum computing could optimise processes at a speed and scale never seen before – with serious benefits passed onto consumers.
In the nearer term, however, ensuring payments are available and accessible for everyone must remain the focus in 2024.
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