Waxing Up for the Fintech Wave

Marine Tarditi, banking counsel at Allen & Overy Luxembourg and master of ceremony of the first CryptoChallenge, which took place in March 2018, tells us more about how Allen & Overy prepares for the Fintech wave.

The startup scene is booming in Luxembourg and the world of Fintech is shining brighter than ever. Luxembourg is being praised as one of the global centres of excellence in the Fintech space. Leading actors have chosen the Grand Duchy as their home, creating a stimulating ecosystem and a cluster of successful Fintech companies. Building on the fantastic growth of the Fintech market, Allen & Overy launched an internal innovative Fintech Summer Campus this summer aiming to generate new ideas for the efficient use of new technologies, to share knowledge and foster brainstorming opportunities around these hot topics. The programme will include topics such as blockchain for beginners and those at more advanced levels, the legal implications of crowdfunding and peer-to-peer lending, the impact of the Internet of Things (IoT) on financial services, the idea of a tokenised future, and upcoming marketplaces and trends in Fintech.

“Addressing the lack of women founders in the Fintech space, the board members of LILLA (Ladies in Law Luxembourg Association) have met WIDE (Women in Digital Empowerment) with the aim to foster new partnerships.”

Remaining flexible

The idea of the Fintech Summer Campus is to avoid overspecialisation, instead embracing a flexible, cross-practice approach that will facilitate adaptation to a fast-changing and nascent sector. The potential for industry and economy disruption is considerable in the short-, mid- and long-term, particularly where blockchain is concerned. Allen & Overy’s priority is to maintain and develop a talent pool of Fintech experts who are able to advise Fintech companies on regulatory compliance, consumer protection, privacy, intellectual property and business transactions. This new Fintech space requires lawyers with a keen interest and expertise in technology and data, who have strong entrepreneurial skills and their fingers on the pulse of the tech market. Allen & Overy’s co-Head of the Fintech team and Head of Marketing, Natacha Oskian, was recently elected to join the Executive Board of the ABBL’s Digital Banking and Fintech Innovation Cluster, and some of our expert lawyers will participate in the working group Distributed Ledger Technology with the Luxembourg financial sector regulator (Commission de Surveillance du Secteur Financier).

Staying connected
  • With external fintech influencers

Allen & Overy uses community action investment to collaborate with different actors within the Fintech market. We are working closely with the Fintech community of the LHoFT and have recently participated, as mentors, in their Hackathon, in which future digital leaders from the Luxembourg Tech School grappled with the question of artificial intelligence. Addressing the lack of women founders in the Fintech space, the board members of LILLA (Ladies in Law Luxembourg Association) ­– including representatives from Allen & Overy as well as other law firms and financial sector companies – have met WIDE (Women in Digital Empowerment), which has launched the WIDE Startup Leadership programme, with the aim to foster new partnerships.

  • Within our A&O global network

We have the benefit of a worldwide integrated and connected network, which allows us to access pertinent information such as foreign consultation or pre-consultation papers on the introduction of regulatory frameworks throughout the world (for example, for crypto-assets or ICOs). This unique Allen & Overy global assistance is in line with the goals of the European Blockchain Partnership signed by the Grand Duchy on 10 April 2018, which will be a vehicle for co-operation among Member States to exchange experience and expertise in technical and regulatory fields and prepare for the launch of EU-wide blockchain applications across the Digital Single Market which aims to tear down regulatory walls.

“It is likely that Fintechs will require their own, specialised area of practice in the years to come.”

Towards a new specialised area of practice in the years to come

Successful fintech players are representing traditional financial institutions and corporations alongside blockchain-based (and other) emerging technology companies. Among the individuals belonging to the different Luxembourg fintech groups, many share backgrounds in emerging companies, venture capital and cybersecurity. In other words, law firms willing to enter the fintech space and leverage its potential should understand that, at least for the foreseeable future, this will be a multi-disciplinary space composed of a disparate group of clients. In parallel, both the law and technology continue to evolve. The PSD2 legislation, set to open consumer financial data to third-party providers, is a good illustration of this, and a major step towards disruption of the whole banking ecosystem (especially because Fintechs are encroaching on banks’ traditional services). It is likely that Fintechs will require their own, specialised area of practice in the years to come. In parallel, the Grand Duchy of Luxembourg is seen by fintech companies as a catalyst for innovation, especially given that the country is widely viewed as an ideal location for post-Brexit relocation and passporting of financial services across the European Union. We at Allen & Overy are ready to meet the challenges of the third industrial revolution and are already preparing for the next CryptoChallenge!

This article was first published in the 9th issue of SILICON magazine. Be the first to read SILICON articles on paper before they’re posted online, plus read exclusive features and interviews that only appear in the print edition, by subscribing online.

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