Not long ago, financial technology (FinTech) startups were all seeking to disrupt the market for financial services and compete directly with financial institutions (FIs) for customers. But as these startups have grown into more mature companies, cooperation with FIs has come to replace disruption for many FinTech firms. These companies have realized that FIs can help scale their technology to larger bases of potential users, and can also help FinTechs raise capital by showing strong partnerships and FI distribution channels.

In turn, FIs now recognize that FinTech firms offer more than competition, representing potentially valuable partnerships with better technology and an improved user experience. By collaborating with FinTechs, FIs can improve product offerings and increase efficiency, all without the FIs committing significant resources to create new solutions themselves.  Continue Reading Access vs. Security: Takeaways For U.S. Financial Institutions from the European PSD2 Open API Framework

When a data breach occurs, the guilty party—a fraudster or criminal syndicate— is often nowhere to be found. Who bears the loss from a breach perpetrated by a fraudster: the consumer whose data was compromised, the financial institution where the data was used, or the business that failed to protect the data? Often, the loss initially falls on the financial institution through account or card agreement provisions or deadlines imposed by statutes or regulations. Can a financial institution recover these losses from a business with whom it has no contract? This depends on which law applies. Continue Reading Recovering Data Breach Losses from Non-Contractual Parties

While U.S. companies focused on the imposition of burdensome data protection laws being implemented overseas, California was hard at work on revamping its own laws. As of June 25, 2018, the home of big technology, Silicon Valley, Facebook, and Google, was prepared to consider the California Consumer Personal Information Disclosure and Sale Initiative (“Initiative”) on the November 2018 ballot. The Initiative sought to enact a version of the California Consumer Privacy Act of 2018, requiring businesses to disclose, on a consumer’s demand, the personal information a business collects, the purpose for which it is used, and to whom it is sold or shared with. The Act also allows individuals to restrict the sharing of their information. Finally, the Act provides a simple path to recovery for violations. Although companies like Facebook and Google dropped their opposition to the Initiative, concerns remained among the business community, so California lawmakers stepped in. Continue Reading CLIENT ALERT: At Rocket Speed – The California Consumer Privacy Act of 2018 Signed into Law Yesterday