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Message: <blockquote data-quote="Angel" data-source="post: 8606" data-attributes="member: 980">Hi everyone,We hope you've been well. We're back with this week's update. Happy reading! __________________________________________________________________________________________________________________________Commercial Awareness Update: 30/01/19The topics covered in this week's update are:<ol> <li data-xf-list-type="ol">Santander closing its branches (by [USER=525]@Sara Moon[/USER]) </li> <li data-xf-list-type="ol">Patisserie Valerie store closures and fraud allegations (by [USER=201]@bugsy malone[/USER])</li> <li data-xf-list-type="ol">Facebook's plan to integrate Messenger, WhatsApp and Instagram (by [USER=260]@Abstruser[/USER])</li> <li data-xf-list-type="ol">China joining e-commerce talks last-minute (by [USER=157]@kitk[/USER])</li> <li data-xf-list-type="ol">China's slow growth (by [USER=980]@Angel[/USER])</li> </ol>__________________________________________________________________________________________________________________________1. Santander closing its branches ([USER=525]@Sara Moon[/USER])The story:Last week, Santander announced that it will be closing down 140 branches across the UK. This Spanish-owned bank said that this is due to the change in consumer behaviour in the British banking industry, as more and more customers are banking online through websites and mobile apps. Over the past three years, Santander saw a 23% reduction in branch transactions while digital transactions have doubled. Other banks have also made similar decisions to close branches and place focus on online banking services. To date, Royal Bank of Scotland have closed 476 branches since last year and Lloyds have shut 131. According to The Guardian, between 2007 to January 2019, half of all high-street bank branches are now closed. Impact on businesses and law firmsIn relation to the impact on businesses, there is an apparent disruption in the banking industry caused by the digital revolution. This means that high-street banks now have to focus on competitive and cost-effective online services to retain customers ranging from individuals to multinational firms. Banks are already heavily investing in FinTech, and many are collaborating with FinTech start-ups to achieve long-term competitiveness. Lloyds is currently seeking to move its 500,000 customer accounts to a new banking system built by Thought Machine. Lloyds says this move will cut costs and allow it to offer more personalised products. Barclays currently offers Pingit, a mobile money transfer service, and BARX NetFX, an automated risk management solution for organisations carrying out large volumes of multi-currency transactions. HSBC is trying to implement distributed ledger technology (DLT) to help clients with cross-border payments better manage their currency flows and has completed the world’s first trade-finance transaction using blockchain last year. As for the impact on law firms, just like any other technological innovations, banks’ increasing reliance on FinTech entails data security problems. Banks are using big data to analyse customer needs and to offer personalised products. The use and storage of a mass amount of personal information requires strong data security measures as well as ensuring compliance with GDPR, such as by obtaining necessary consent from customers on the use of personal data. Development of FinTech driven services has also led to FinTech patents race. Banks are yet behind tech firms in obtaining intellectual property rights for FinTech products. This means that they may be paying huge sums of money in the future in royalties and licensing fees for using FinTech services. This is highly problematic considering the rising importance of providing FinTech services to survive in the industry. Barclays seems to be in the lead in the patent race, with currently more than 160 FinTech patents to its name. Banks would have to focus on obtaining patents on FinTech services to avoid unnecessary costs in the future. This would involve FinTech lawyers advising on securing intellectual property rights.______________________________________________________________________________________________________________________2. Patisserie Valerie store closures and fraud allegations ([USER=201]@bugsy malone[/USER])The story:Patisserie Valerie has fallen into administration just three months after an alleged fraud was uncovered. 70 of its 200 outlets are closing and prospective buyers are being sought to acquire the remaining stores. Approximately 900 people are being made redundant with a further 2,100 jobs at risk. Luke Johnson (with 37% shareholding) has seemingly advanced another £3 million to keep one third of the stores trading and to fund January wages. This is quite an exceptional case as Patisserie Valerie was seemingly making good profits prior to this. For example, in October 2018 it was trading with approximately a £100 million turnover. Employees will be keeping a close eye on whether a buyer can be found for the rest of the outlets. On the face of it, Patisserie Valerie is a good brand with a good high-street presence and was making good profits for a long period of time. Thus, there is a high chance that the remaining stores will stay opened as long as they are what the administrators consider as ‘profitable stores’. With that being said, prospective purchasers will likely be wary of the current fraud allegations, figures and ‘black-hole’ in the chain’s accounts that is estimated to be around £40-50 million. Indeed, this may dampen the price that they are prepared to pay for the chain. An in-depth investigation is clearly needed. There is also a criminal aspect to the allegations. Thus, the police and serious fraud office are likely to be involved to investigate how the irregularities emerged and whether it was fraudulent. Impact on businesses and law firms:Administrators will be focused on trying to preserve as much of the business as they can for the benefit of creditors. Financial backers, such as banks with unsecured loans, are likely to take a hit. These fraud investigations may lead to further enquiry on the management and structure of the chain’s corporate governance. Patisserie Valerie will require legal assistance on its potential criminal liabilities and redundancies made. It will be interesting to see the outcome of these fraud investigations and whether this will have knock-on effects for other companies to seek legal advice on their current management. __________________________________________________________________________________________________________________________3. Facebook’s plan to integrate Messenger, WhatsApp and Instagram (@Abstruser)The story:Facebook has announced that it is planning to merge Facebook Messenger, WhatsApp and Instagram into one integrated system, so that it will be possible to send messages across platforms without switching apps. Facebook plans to implement end-to-end encryption across these three apps, which means that only participants of a conversation will be able to view sent messages. Currently, only WhatsApp features end-to-end encryption. Facebook acquired WhatsApp and Instagram in 2014 and 2012 respectively, but the original founders of both companies left last year. Mark Zuckerberg’s plan to integrate and encrypt these platforms comes during a tumultuous time for Facebook. The company has come under recent fire over data protection concerns. For example, last year, it came to light that political consultancy Cambridge Analytica had accessed the personal data of up to 87 million Facebook users without their consent. The data was allegedly used to influence political events such as the Brexit vote and the Trump campaign. Therefore, this move may very well be an attempt by the company to clean up its data protection record. However, given Facebook’s recent history, many users have voiced concerns about how much data will be shared between platforms. In 2016, the UK’s Information Commissioner investigated data sharing between Facebook and WhatsApp, in an effort to increase transparency about how their personal data was being used and shared for advertising or other purposes.Impact on businesses and law firms:Facebook’s plan to integrate these services comes at a time of stiff competition from other tech companies like Apple and Google, who compete with Facebook through their own messaging services like iMessage. According to one former Facebook executive, merging these three platforms will help to boost flagging user growth in developed regions like Europe and America. However, the merging of Facebook Messenger, WhatsApp and Instagram may pose problems for competition law enforcement. Integrating the three services ties up the company more compactly, making it harder for regulators to break up the company into smaller components. In addition, while end-to-end encryption may assuage demands for greater data privacy, some criminal law enforcers have voiced concerns that encrypted conversations may make it difficult to track criminal activity. Balancing these competing imperatives will be a difficult feat, and all eyes will undoubtedly remain on Facebook as it navigates these concerns.</blockquote>

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