Branko Bjelobaba, general insurance specialist

Next year will be all about the building in of Consumer Duty. So ensuring that products and services are fit for purpose, that products evidence fair value, and that the whole industry gets its head around product value.

It’s year two of it now. Year one was an unmitigated disaster for the implementation of product value. I’m hoping in year two the FCA actually provides what the consumer really should have. As the FCA gets hold of more data, it should be able to interpret that data and tell us what it thinks.

“I didn’t see any need to impose great levels of solvency when the overall solvency of the business was more than enough to cater for the risks that the insurer was running.”

Branko Bjelobaba, general insurance specialist

For Solvency II, the EU took a decision to increase the levels of solvency required by insurers when transacting certain what they believed were higher risk areas of insurance placement, and therefore insurers would be required to have greater solvency. Whereas in the UK we are regulated for solvency insurers by the potential. I didn’t see any need to impose great levels of solvency when the overall solvency of the business was more than enough to cater for the risks that the insurer was running.

So hopefully with insurers requiring less but still adequate levels of solvency they will free up cash in a way that’s good for them and everyone else.

Huw Davies, Freddi Gyara and Chris Michael, co-founders, Ozone API

We’re five years into the UK journey and open banking is rolling out around the world. Open banking will continue to be a big trend for a few years to come before it reaches the stage of being the “hidden plumbing” that exists, powering the world without people talking about it.

In the UK, open banking payments growth is continuing to rocket. The small acorn is showing signs of becoming an oak tree, with over £8bn ($9.8bn) of open banking payments taken by HMRC alone.

With NatWest leading the way for the big banks in the adoption of variable recurring payments (VRPs), the foundations are now there for open banking to help solve a much broader range of payments, from subscriptions to frictionless e-commerce to business-to-business payments.

In recent years, we’ve seen account-to-account payment fraud accelerate. Fraudsters are continually coming up with more devious ways to target the vulnerable and play on people’s fears and insecurities.

“In 2023 we’ll see far more financial and payment institutions implement Confirmation of Payee.”

Huw Davies, Freddi Gyara and Chris Michael, co-founders, Ozone API

In 2023 we’ll see far more financial and payment institutions implement Confirmation of Payee, which will help. The implementation of strong customer authentication and open banking is also helping. But the industry will continue to look for what is next beyond the basic Confirmation of Payee (CoP) check.

With the pandemic, we saw many fraudulent messages designed to get people to part with their money. We’re seeing it with the cost of living crisis too, with fraudsters playing on people’s fears about rising utility bills and other costs.

CoP has come into effect and is having an impact, but it is by no means the complete solution. More is needed.

It should involve piecing together more data points from more sources to ensure that the payer has much more certainty about the identity of the payee. Identity-based payments are the future and we’ll see conversations moving beyond CoP to head in this direction.

Sefan Rust, Laguna Labs, CEO

Crypto has already gone through a 360-day winter. Barring any additional malicious attacks by fraudulent, corrupt individuals in this industry, we should be on track to have a solid recovery in 2023. The industry will build out some new foundations, great new services, and amazing user experiences that will further highlight the benefits of decentralized finance and the metaverse, while we will see new applications for NFTs, and maybe even security tokens.

“It is likely that 2023 will see a recovery in crypto as fiat currencies across the world continue to decline in value. Regulators will stall to allow big institutions to enter crypto.”

Sefan Rust, Laguna Labs, CEO

It is likely that 2023 will see a recovery in crypto as fiat currencies across the world continue to decline in value. Regulators will stall to allow big institutions to enter crypto.

While the going is tough right now, in these times the tough get going. This is a market where opportunity is rife, and where smart investors will start placing bets as they prepare for the development of a stronger crypto economy. Indeed, this is economics 101 as taught in any university: the time to invest in infrastructure and to build is the time when everything and everyone else is retracting.

Seasoned investors stop investing in a bull market because that’s when everybody else FOMO’s in. Instead, as economies hit high growth periods they reap the benefits of their bear market activity and capitalize on the infrastructure they have put in place during the tough times.

The US Securities and Exchange Commission (SEC) continues to make noise about the regulation of crypto, most recently stating that it will be regulated as a security. However, we are yet to see anything firm and binding. This is likely because the regulator is stalling to allow time for big traditional finance institutions to enter the market, with the SEC perhaps hoping that JP Morgan will do its job for it.

It is likely that the IMF and the EU are also stalling for the same reasons. Indeed, with CBDCs set to begin entering the market next year, you will see a number of traditional finance behemoths enter the field of cryptocurrencies. As such, it may be we start to see quite a clear split between centralized and decentralized finance.

Alex Viall, Head of Regulatory Intelligence, Global Relay

Regulators in the US and the UK will pursue the move towards consolidated tape and transparency around market transactions.

Operational resilience, cybersecurity, business continuity – the need to comply with all of those requirements is intensifying and it’s extending into due diligence around the vendors you use and how they perform and reviewing them; even oversight of technology companies in the US, UK, and Europe.

“You cannot afford to mistreat consumers in the current environment so we will see more around the Consumer Duty.”

Alex Viall, Head of Regulatory Intelligence, Global Relay

Smaller vendors may have problems when it comes to compliance. We’ve got massive inflation, recession, very tough macro conditions, and I think the regulators are worried about a market crash and about consumers being able to bear all of this. You cannot afford to mistreat consumers in the current environment so we will see more around the Consumer Duty.

In the UK, the Edinburgh reforms set out by the Chancellor Jeremy Hunt will be really interesting. This is all part of the Financial Services Bill.

On recordkeeping, people are saying the US has really come down hard, and it looks like there will be more in the US. So we will be looking at how that will be enforced in the next year.

There will be an increasing focus on the big market players and their liquidity, capital reserves, and their risk taking.