The U.K. financial regulator is banning consulting firms from selling companies that buy audit services at the same time they sell fintech services. This is leading PwC to decide to let the fintech arm at its disposal stand on its own two feet. This includes a name change from eBAM to LikeZero.
In the consulting world, it has for some time been prohibited to provide audit and consulting services to the same client at the same time. This seemingly rather logical measure was included in the law in 2013, in order to prevent conflicts of interest and keep the level of control high. With the development that fintech has gone through in recent years, it was waiting for the moment when such measures would start to be introduced here as well.
Under the name eBAM, accounting and consulting firm PwC has developed technology that provides banks and other financial institutions with automated support to draft contracts that are fully compliant with standing laws and regulations. A major challenge of laws and regulations is that they are regularly subject to revision, something that poses obvious compliance risks. By their own admission, some of the world's largest financial players are using this technology.
From now on, however, PwC itself may no longer offer this technology to clients for whom it also already audits the books. This is the result of new policy from the Financial Reporting Council (FRC), similar to the Netherlands Authority for the Financial Markets (AFM). The FRC now prohibits selling audit services and fintech services such as eBAM to the same client. This applies to both existing audit clients and new audit clients.
PwC is therefore putting the fintech arm on its own feet, involving a so-called spin-out. At the same time, the beast is also getting a new name, namely LikeZero. "Under the new circumstances, PwC is not the best place to transform LikeZero into a global company," argues Michael Lines, LikeZero's new CEO. Lines was previously "head of contract solutions" at PwC.
PwC is selling LikeZero to current management, which is financially backed by private equity firms Souter Investments and Manfield Partners.
