Global Legal Insights - Fintech: Fintech: 2024: 6

Nelson Mullins Riley & Scarborough is pleased to present the 2024 Edition of Global Legal
Insights Fintech. We are honoured to continue serving as contributing editors and hope that
the insights and analysis presented in this edition will be helpful in navigating the constantly
changing legal environment faced by traditional financial institutions and fintechs.
Fintech encompasses all manner of technological innovation in the delivery of financial
services. The importance of fintech cannot be understated as a driver of change in the way
consumers access financial services and the way financial institutions deliver these services
to meet consumer demands, services and the manner in which fintechs meet consumer
needs, and has a ltered how financial services are delivered. F uture homeowners are now
able to apply for a mortgage in the comfort of their home with a mobile device. Contactless
payment methods and robust payment systems have reshaped how we move money and
settle transactions across the world, oftentimes in minutes. Meanwhile, the rise of artificial
intelligence has reshaped how consumers and financial institutions interact with one another.
Despite ongoing litigation in the courts and disparagement in the media, blockchainbased
technology and digital assets have continued to find mainstream acceptance in the
finance industry. While the most popular use case for blockchain technology remains to
be digital assets such as cryptocurrencies, stablecoins and central bank digital currencies,
blockchain technology has drawn great interest from service providers who have developed
digital wallets to custody digital assets, built platforms to buy, sell, and trade digital assets,
created non-fungible tokens with a multitude of use cases ranging from the tokenisation
of real world assets such as real estate and art to the creation of digital art collectibles and
even as a means to grant holders rights to join an exclusive club. Today, an increasing
amount of financial institutions, including some of the largest banks in the world, have
dedicated innumerable resources to figuring out novel ways to merge traditional financial
services with blockchain technology to combat identity theft and fraud, enable alternative
real-time payment mechanisms, and foster capital formation.
It comes as no surprise, then, that rapid technological innovation in the financial services
space one of the most highly regulated industries in the world has been met with
heightened legislative and regulatory scrutiny from Congress, market regulators like the
SEC and CFTC, consumer-focused regulators like the CFPB, and federal banking regulators
like the OCC, FDIC and the Federal Reserve. However, challenges and frustrations
continue to mount among fintechs, financial institutions, and consumers alike because
this heightened scrutiny from the government has yet to lead to robust legislation
and regulation specifically tailored to these innovations, which leaves many industry
participants wondering what is the appropriate path forward and, even more important,
what is truly considered responsible innovation. Nevertheless, innovation waits for no
one and it is an exciting time to see how the law and innovations in financial technology
continue to clash and grow. See more