On May 16, Sarah Pritchard, Executive Director of Markets, and Executive Director of International at the Finance Conduct Authority (FCA) delivered a speech on change in response to changing threats. During XLOD Global New York – The Future of Non-Financial Risk & Control across the 3 Lines of Defence, she unveiled strategies to counter new emerging threats from technologies.
In the fast-running world where new technologies are emerging every day it is very important to be one step ahead to counter these challenges. Cryptocurrencies and non-fungible tokens (NFTs) are some new challenges in front of FCA. According to Sarah Pritchard, the role of social media also needs to be kept in mind while dealing with emerging threats. Many consumers consider social media like Twitter, Tik Tok, and Instagram to seek advice related to financial products.
“The FCA has been working with celebrity influencers and their agents to clamp down on promotions of illegal or risky financial products”, says Sarah Pritchard. Also, she added that an unlimited fine and a maximum 2-year prison term apply to the criminal offense of making an unlawful financial promotion. Not just the United Kingdom, but the United States is also keen to protect its citizens from financially risky social media advertisements. In March, the US Securities and exchange commission (SEC) charged eight celebrities for manipulated advertisements related to crypto products.
In March 2023, the United Kingdom government unveiled a plan to regulate crypto under the economic crime plan. While financial crimes such as illegal crypto ATMs and financially risky social media advertisements are gaining traction in the country the UK government has stepped up to tackle these issues.
In a recent speech, the Executive Director of Markets, and Executive Director of International said that as threats change we also need to change to address those challenges. Our highly linked world is changing at an unprecedented rate, which presents both opportunities and risks. For example, in the case of cryptocurrencies which presents both aspects of technology from cutting costs of cross-border transactions to threats like cyber thefts.
For those who are not aware, the FCA has collaborated with a global alliance of regulators, the International Organization of Securities Commissions ( IOSC) to develop a fintech task force. The IOSC works on two fronts: first deals with crypto and digital assets (CDA) and second deals with decentralized finances (DeFi). According to reports, the CDA section would be led by the United Kingdom FCA and will provide the required inputs and knowledge. The speech of Sara Pritchard depicts an optimistic approach towards the fintech industry and the FCA’s intention to keep themselves updated with emerging threats from new technologies.
