Law and Regulation of Electronic Finance and Internet Banking

Welcome to the module Law and Regulation of Electronic Finance and Internet Banking. This module aims to give you an appreciation of how the internet facilitates the electronic delivery of banking and other financial services. It will examine the development of internet banking from its earliest days, to where it is now, and will consider what the future may hold. Similar treatment will be afforded to online share-dealing venues as well as raising business capital through the internet.

The module will present comparative information on the prudential regimes and attendant laws and regulations relating to banking and securities in the European Union, the United Kingdom and the United States. How governments facilitate and regulate contracts for financial products and services online will also be explored, as will issues relating to the protection of personal data in an online environment, including the role of whistleblowers.

Learning outcomes

When you have completed your study of this module, you will be able to:

• discuss internet banking from its origins in the early 2000s to the most recent developments
• explain the concept of prudential supervision and the underlying public policy, and identify and describe the banking supervisory frameworks in the EU, UK and US
• identify and critically discuss government regulation of the business of banking in the EU and the US
• define and distinguish the concepts of harmonisation and mutual recognition in the context of cross-border banking services in the EU, and critically discuss the concept of the ‘general good’ derogation which underpins prudential regulation and consumer protection
• critically discuss the methods by which risk is allocated between banks and their customers in the provision of banking services
• identify and critically discuss issues arising in online share-trading with regulated entities and how Conduct of Business rules apply to online brokerage firms
• critically discuss how securities regulators have addressed crowdfunding, robo-advisers and initial coin offerings as well as facilitating use of the internet for securities offerings exempt from registration
• identify EU and US prudential securities regulators and critically discuss the adoption of the ‘effects’ test with respect to the assertion of regulatory jurisdiction
• define and analyse the prudential issues for securities regulators arising from securities activities conducted through the internet
• identify and critically discuss the relevant EU directives applicable to the marketing of financial services over the internet to consumers
• outline the circumstances under which financial services firms may fulfil their regulatory or statutory responsibilities by electronic delivery of mandated disclosures
• identify and critically discuss EU and US legislation facilitating the creation of enforceable contracts online, and each region’s approach to the use and choice of law clauses and mandatory arbitration clauses in those contracts
• describe and critically discuss the provisions of EU law as it relates to the protection of personal data of consumers or customers of financial service providers, and the terms of the US/EU Privacy Shield Framework
• outline and analyse the public policy underlying the use of whistleblowers to identify wrongdoing by financial services establishments, and the tensions which such policy has caused with respect to existing EU provisions relating to the protection of personal data.

Tuition and assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 6, and the second assignment at the end of the module, on the Tuesday after Week 10. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in September/October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in July each year.

Study resources

• Study guide: The module study guide is carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the assigned readings.
• Key texts: Gkoutzinis A (2010) Internet Banking and the Law in Europe. Cambridge UK, Cambridge University Press.
• Readings: Throughout the module you will be directed to study a selection of readings, including journal articles, book extracts and case studies that are of particular relevance and interest to the topics covered in the module.
• Virtual learning environment: You will have access to the VLE, a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Study calendar 2022/23

Study calendars are subject to change.

Module overview

Unit 1 Introduction

• 1.1 The Promise of Internet Banking
• 1.2 Digital Products and Services
• 1.3 Data Aggregators and Paymant Systems
• 1.4 The Rise of Fintechs
• 1.5 Fintechs and Banking
• 1.6 Millennials and the Business of Banking
• 1.7 Banks and Big Data
• 1.8 AI and Banking
• 1.9 Cryptocurrencies

Unit 2 Prudential Supervision of Banking

• 2.1 Prudential Regulation of Banking
• 2.2 The EU Supervisory Framework
• 2.3 Prudential Bank Regulation in the United Kingdom
• 2.4 Prudential Bank Regulation in the US

Unit 3 Government Regulation of the Business of Banking

• 3.1 Regulation in the European Union (EU)
• 3.2 Regulation in the United States

Unit 4 Allocation of Risks in the Business of Banking and Financial Services

• 4.1 Allocation of Risk by Statute
• 4.2 Allocation of Risk in Bank–Customer Contracts
• 4.3 Judicial Forum Selection Clauses
• 4.4 Waiver of Jury Trial or Access to Courts
• 4.5 Arbitration Provisions
• 4.6 Burden of Proof

Unit 5 Securities Activities on the Internet

• 5.1 Internet Share Trading Venues
• 5.2 The Rise of Robo Investment Advisers
• 5.3 Issues Relating to Online Securities Offerings
• 5.4 Crowdfunding in the US and UK
• 5.5 Other Internet-Based Securities Offerings
• 5.6 Virtual Currency and Initial Coin Offerings

Unit 6 Prudential Regulation of Securities Activities

• 6.1 Assertion of Regulatory Jurisdiction in an Online World
• 6.2 US State Securities Regulators
• 6.3 Securities Regulators in the EU, UK and US
• 6.4 Prudential Issues Relating to the Regulation of Investment Firms

Unit 7 Marketing and Delivering Financial Services over the Internet

• 7.1 Introduction
• 7.2 EU Electronic Commerce Directive (2000)
• 7.3 EU Distance Marketing Directive (2002)
• 7.4 EU Unfair Commercial Practices Directive (2005)
• 7.5 EU Directive on Unfair Terms (1993)
• 7.6 EU Directive on Alternative Dispute Resolution for Consumer Disputes (2013)
• 7.7 Electronic Signatures
• 7.8 Electronic Delivery of Mandated Disclosures

Unit 8 Consumer Privacy and the Internet and Whistleblowers

• 8.1 Leaky Ships – Data Security in Financial Services
• 8.2 Data Protection – The EU Dimension
• 8.3 Data Protection – The US Dimension
• 8.4 EU-US Framework on the Transfer of Personal Data
• 8.5 Whistleblower Schemes – The Personal Data Dimension

Module samples

• M445 Module Introduction (PDF)
• M445 Specimen Examination (PDF)
• M445 Unit 1 (PDF)

Disclaimer

Important notice regarding changes to programmes and modules