Beside impacting nearly all other aspects of everyday life, new technologies are also changing the financial industry and the way consumers and firms access financial services.
But while technological innovation in finance is not new, investment in technology and the pace of innovation increased significantly in recent years, on a very wide array of issues ranging from social networks, artificial intelligence, machine learning, mobile applications, distributed ledger technology (DLT), cloud computing or big data analytics. FinTech also gives rise to new services and business models, involving the whole financial sector.
Initial Coin Offerings (ICOs) are an example of Blockchain application, representing a new way for organisations to raise capital, and emerging as an alternative to the traditional models of startup investment and e-commerce growth. Like an Initial Public Offering (IPO), an ICO can be used to raise funds, but unlike an IPO, it is less familiar to regulators. In an ICO, blockchain technology enables the issuance of virtual coins -or tokens in exchange for a cryptocurrency payment. ICOs recently gained increasing attention from investors, businesses, media and regulators, and became popular, because of the ease with which they can be used by businesses to obtain new, - and as some argue- more global and democratic public funding, with less complexity and greater speed than traditional methods. However, like all pioneering new fields, they are not without risks and ethical issues to consider.
At international level, FinTech is a priority area for the G20, and the European Commission is about to publish its Action Plan on Fintech, which entails as series of legislative and non-legislative actions to be pursued a short medium and long term.
Finance professionals and professional accountants will need to adapt to the new Fintech, Blockchain and ICOs landscapes to be able guide their clients and organisations seeking funding. They thus need to maintain an awareness and understanding of the underlying issues, including tax and compliance laws.
With this in mind, ACCA and EY organised a joint conference to discuss the latest policy development on Fintech as well as risks and opportunities of ICOs, which are at the forefront of emerging technology in blockchain and distributed ledgers.