The Implications of New Regulatory Challenges for UK Small Businesses
Rife with advancements in technology, new financial regulations and waves of thinking, the landscape of modern business is evolving faster than ever; pushing forward-planning to the forefront of driving success.
As 2018 has already seen MiFID II and GDPR coming into force, now is most certainly the time for small businesses to take note of regulatory changes and evaluate how this will affect their business in the long-run. Staying on top of these protocols could be the deciding factor in giving your business that competitive edge or hindering your progress.
Here, Rob Straathof, CEO at Liberis, takes a closer look at some of the regulatory challenges that could affect your small business this year.
MiFID II
Put simply, MiFID II is a regulation that aims to protect investors and ensure financial players operate effectively and honestly. The implementation should also help financial regulators spot any anomalies or irregularities within the market; encouraging banks and advisors to have more responsibility when targeting appropriate investors.
But what does this mean for small businesses? MiFID II initially raised concern that some investors may avoid supporting small businesses because of these new restrictions and the availability of stock research. Brokers may have also been reluctant to invest into small and medium-sized enterprises (SMEs) which in the long term could undermine the ability for small businesses, as the lifeblood of the UK economy, to scale and grow.
To combat this, small businesses have sought the support needed in order to comply. This includes conducting valuable research into finding out what exactly would affect them and their business, listing the help of specialists, and even investing
While there’s not enough research readily available to analyse the impact of MiFID II to date, many companies are looking at the services and options available to support in complying.
General Data Protection Regulation (GDPR)
GDPR is here! And there’s no way you could’ve missed it.
This is the new regulation in EU law on data protection and privacy for all organisations and individuals within the European Union. One of the biggest changes to arise from the onset of GDPR is new terms of consent, which have become increasingly explicit. This has impacted the way all businesses collect data; so, if you haven’t already, you should be placing focus on improving your security protocols for handling clients’ personal data.
When GDPR came into force on May 25 this year, just half of UK companies were compliant. This demonstrates they were unaware of the implications that would hit them if they didn’t, including hefty fines.[1]
In a world where there are now ever-changing regulations and simple to use communication services, businesses need to take note of advancements in technology and innovation to stay ahead of the curve, stay relevant to customers and ultimately ensure compliance.
The Shift Towards Open Banking
On the rise in the world of regulation is PSD2 which, due to the shift
The alternative finance space is also developing rapidly, offering a way to grow your business through collaboration with trusted partners whilst enhancing your business potential and working in line with your needs. Make sure you are familiar with all of your options when looking to support your business to ensure you’re on the front foot with the latest developments.
It’s an exciting time to build your business and, in an exciting, ever-evolving environment, you can get ahead by staying up to date with the above regulations and adjusting your strategy accordingly.
Rob Straathof is CEO at Liberis, the leading alternative finance provider, offering a better way to finance UK small businesses
[1] ICSA: The Governance Institute and The Core
