Financial regulators in the UK have banned consulting organizations from selling fintech services simultaneously to companies that purchase audit services. This led PwC to the decision to let its fintech arm stand alone. This also includes changing the name from eBAM to LikeZero.
In the world of consulting, for some time it has no longer been permissible to provide audit and consulting services to the same client at the same time. This seemingly quite logical step was included in the law in 2013, to prevent conflicts of interest and keep the level of control high. With the developments that fintech has experienced in recent years, we will have to wait until similar measures are implemented here as well.
Under the name eBAM, accounting and consulting firm PwC has developed technology that provides automated support to banks and other financial institutions to draft contracts that fully comply with current laws and regulations. The main challenge with laws and regulations is that they are frequently revised, creating obvious compliance risks. By their own admission, some of the world’s largest financial players are already using this technology.
However, PwC may no longer offer this technology to clients whose books have been audited by the firm. This is the result of a new policy by the Financial Reporting Council (FRC), which is similar to the Dutch Financial Markets Authority (AFM). The FRC now prohibits the sale of audit services and fintech services such as eBAM to the same customer. This applies to existing audit clients and new audit clients.
Like Zero
Therefore, PwC is putting a fintech hand in its own hands, involving a so-called ‘spin-out’. At the same time, this creature also got a new name, namely LikeZero. “In this new environment, PwC is not the best place to transform LikeZero into a global company,” said Michael Lines, LikeZero’s new CEO. Lines previously served as ‘head of contract solutions’ at PwC.
PwC sold LikeZero to current management, which is financially backed by private equity firms Souter Investments and Manfield Partners.
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