Digital shifts and legal turns podcast – Guiding your digital transformation journey

The financial services industry is experiencing significant transformation, driven not only by traditional banking institutions but also by new market entrants such as FinTechs and challenger banks. Digital transformation has been crucial to their market entry and success.

In this episode, Aatif Ahmad, Financial Services Regulatory expert at Penningtons Manches Cooper, and Oskar Becker from Schalast Law, delve into the dynamic landscape of digital transformation within the financial services sector. They explore the regulatory challenges and considerations that come with this rapid evolution.

Digital transformation introduces a range of risks, from cybersecurity threats and regulatory breaches to financial instability and supplier insolvency. In this episode, Sarah Kenshall, Matt Clarke (Cyber Director, Partners&), and Phillip D’Costa outline the key corporate, technological, and contractual risks businesses must address.

They discuss the importance of governance frameworks, cyber resilience, and regulatory compliance, as well as the need for clear operational resilience clauses in vendor agreements. Insurance considerations are also explored, including how businesses can ensure cyber insurance covers digital transformation-related risks and why a well-structured contractual risk framework is essential to avoid costly legal disputes and project failures.

Digital transformation projects often encounter delays, disputes, and unexpected challenges, many of which stem from misaligned expectations, unclear deliverables, and inadequate contractual protections. In this episode, Joanne Vengadesan and Phillip D’Costa explore the common pitfalls businesses face, particularly in data migration, change management, and project implementation. They discuss the importance of maintaining flexibility in contracts, ensuring clear definitions of in-scope vs. out-of-scope work, and having mechanisms in place to manage disputes before they escalate.

Exiting a failing project requires careful navigation of termination clauses, liability limitations, and potential claims for wrongful termination, making it essential to have a well-defined exit strategy from the outset. This episode provides expert legal guidance on managing project difficulties while minimising legal and financial risks.

Digital transformation is a key focus in M&A transactions and investment due diligence, with investors scrutinising contracts, intellectual property rights, and regulatory compliance before committing to deals. In this episode, Oliver Kidd and Joanne Vengadesan discuss the legal risks that arise when acquiring or investing in businesses undergoing digital transformation. They highlight critical areas such as vendor contracts, IP ownership, open-source software licensing, and regulatory obligations, which can impact valuations and post-transaction integration.

Understanding change-of-control clauses, termination rights, and business continuity terms in vendor agreements is vital for any company considering an acquisition, investment, or sale of a technology-driven business. This episode explores how businesses can proactively structure their digital transformation efforts to enhance their investment appeal and avoid legal pitfalls.

As businesses integrate AI and automation into their digital strategies, navigating data privacy and cybersecurity regulations becomes increasingly complex. In this episode, Charlotte Hill and Dan Lovett break down the legal frameworks governing AI and data flows, examining the EU AI Act, UK regulations, and sector-specific compliance requirements.

They explore the risks associated with AI-driven data processing, intellectual property, and commercial confidentiality, highlighting how businesses can ensure they are not inadvertently exposing sensitive data or granting AI providers the ability to learn from their proprietary information. From understanding the obligations of data controllers vs. processors to mitigating the risks of data breaches and regulatory non-compliance, this episode is essential listening for any business leveraging AI in digital transformation.

Digital transformation often leads to outsourcing and operational changes, which can trigger significant employment law implications under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). In this episode, Gemma Woodhouse and Joanne Vengadesan examine how TUPE applies when staff are reassigned due to changes in service providers, particularly in industries like helpdesk support and IT operations.

They discuss the legal obligations for businesses taking on employees from an outgoing provider, the challenges of workforce restructuring, and how businesses can manage disputes when suppliers argue that services are overstaffed. With TUPE obligations extending for two years post-transfer, this episode provides essential insights on how businesses should prepare for, negotiate, and mitigate the impact of TUPE during digital transformation projects.

A well-structured Statement of Work (SoW) is the foundation of a successful digital transformation project, ensuring clarity between all parties involved. In this episode, Sarah Kenshall and Oliver Kidd explore why an SoW is crucial in defining project scope, deliverables, and responsibilities, and how it works alongside a Master Services Agreement (MSA) to provide a contractual framework for technology projects.

They discuss common legal pitfalls businesses face, including the challenges of negotiating deliverables, managing dependencies, and aligning service descriptions with contractual warranties. Whether you are procuring software or providing digital solutions, this episode explains how to draft effective agreements that mitigate risk, prevent disputes, and ensure project success.

Vendor relationships and contract structuring are critical to any successful digital transformation, but many businesses fail to take a holistic approach when engaging with new technology providers. In this episode, Sarah Kenshall, Joanne Vengadesan, and Phillip D’Costa discuss how businesses should assess existing contracts, identify risks in vendor agreements, and ensure their procurement processes align with long-term business needs.

They explore real-world examples, such as CRM system implementation, automated helpdesks, and customer-facing platforms, to highlight the key contractual issues businesses must address before embarking on digital transformation. From ensuring seamless data migration to mitigating AI-related risks in supplier agreements, this episode provides essential guidance on how to structure vendor contracts to support your digital evolution.