Trends in FinTech: Navigating Innovation and Regulation

I recently attended the GC Talk Series organised by The Oath and led by Bird & Bird, focusing on Trends in FinTech. The event covered a range of topics shaping the future of financial services, including:

• Blockchain and AI integration;

• Buy Now, Pay Later (BNPL) models and their evolution;

• The tokenisation of real-world assets (RWA);

• Stablecoins and crypto regulation, and

• The broader regulatory frameworks that are being developed to address these innovations.

What stood out to me was the tension between innovation and regulation. As technology moves at breakneck speed, regulation feels like it’s in a constant game of catch-up. This creates unique challenges, especially for borderless systems like blockchain or tokenised assets. Each jurisdiction has its own approach, leading to a fragmented landscape that makes interoperability and global scalability a complex task.

The BNPL Model: Evolution and Challenges One key area of discussion was the Buy Now, Pay Later (BNPL) sector. While BNPL has grown rapidly as a convenient payment model, its regulation is inconsistent. Questions around consumer protection, transparency, and the potential for unchecked debt are being raised in many jurisdictions. Regulators are clearly taking notice, and we’re likely to see stricter rules on how these products are marketed and implemented.

AI in Financial Services: Policy and Liability AI’s role in financial services is another area where innovation and regulation intersect. We explored the emerging policies surrounding AI use and the thorny issue of liability. When something goes wrong with an AI-driven financial system, who’s accountable? Is it the developer, the organisation using the system, or the AI itself? These are tough questions with no simple answers, but they’re critical to building trust in AI-powered financial products, and policy drafting in AI systems is going to be crucial for shaping this landscape.

Crypto and Stablecoins: Global Push for Clarity Crypto regulation continues to dominate FinTech conversations. The rise of stablecoins, in particular, has put pressure on regulators to strike a balance between fostering innovation and mitigating risk. Stablecoins are virtual currencies that are pegged to real-world commodities (such as gold, the US dollar, or even cocoa), offering a potential bridge between traditional finance and the decentralised world. However, their stability relies on trust in the underlying asset — and when trust is lost, we’ve seen how quickly things can unravel.

Tokenisation of Real-World Assets Another fascinating trend is the tokenisation of real-world assets. Whether it’s real estate, art, luxury cars, or commodities, tokenisation opens up new ways to fractionalise ownership and improve accessibility. But, as with blockchain, the borderless nature of tokenisation raises questions about jurisdiction, compliance, and enforcement. How do you enforce property laws or ownership rights when assets are tokenised and traded globally? Are the organisations that are currently tasked with regulating these sectors (such as the Land Registry or DVLA in the UK) properly equipped to handle tokenisation?

The Global Regulatory Challenge The overarching theme of the discussion was the difficulty of regulating borderless systems in a world of fragmented laws. Blockchain, crypto, and tokenisation are built to transcend borders, but financial regulation remains firmly tied to national frameworks. This tension creates significant hurdles for companies looking to scale their operations globally.

The challenge isn’t just for regulators — businesses, legal teams, and policymakers all need to collaborate to find workable solutions. A unified global framework might feel like a distant goal, but it’s a conversation worth pursuing. We've seen how successful the adoption of GDPR has been, and now global jurisdictions have also agreed to adopt the Travel Rule.

Final Thoughts Events like this highlight just how fast FinTech is evolving and how much work still needs to be done to create an environment where innovation can thrive, while ensuring adequate consumer protection and market stability. It will be interesting to see where we are in the next 5 years - Can we work together to harmonise a global regulatory approach, or are we destined for a patchwork system where companies must navigate jurisdiction by jurisdiction?

A special thanks goes out to The Oath, Bird&Bird, and LexisNexis for putting the event together.