Regulations may leave firms facing funding 'paralysis The law firm added that, set against a backdrop of financial regulation already working its way through the system, "which is expected to run to 60,000 pages of new bank regulations in the EU alone," it could take years to clarify exactly what the growing number of regulations mean. This would "create confusion and uncertainty in the market and bring with it a prolonged period of credit paralysis," the report warned. Allen & Overy also said that Europe is "far behind" the US in the use of non-bank forms of finance for small businesses. It warned of a risk that regulations would "dry up" opportunities to bring new sources of capital into play in the SME market, such as pension funds. However, Anil Stocker, co founder of Market Invoice, a website that advances cash against invoices, said there are plenty of reasons for optimism about non-bank finance in the UK. "My estimates show that [online] alternative finance platforms will have channelled nearly £200m to British SMEs by the end of this year ... these companies were very niche players at the start of the year," he said. Of course, not everything will go smoothly - 2013 will see an interrogation around security, fraud and default ratios on these platforms. Technology can create radical change for good in dusty old industries - our financial services sector is certainly ripe for such change.