‘Keep the customers’ money safe’ is the top priority for payment and e-money institutions in the UK

The regulator is unlikely to display leniency towards inadequately prepared payments and e-money companies, according to insights shared by fscom at a major industry event in London.

Alison Donnelly, a director at fscom, stressed that given the repeated warnings over the past number of years, the Financial Conduct Authority (FCA) expects the sector to have matured in its approach to safeguarding customers’ funds and planning for the worst-case outcomes, particularly in the current economic environment of increasing costs and restricted investor financing.

Donnelly emphasised the need for businesses to address the regulatory priorities outlined in the FCA’s March 2023 portfolio letter to the sector and reiterated again in the keynote speech given by Nicholas Webb, Manager, Fixed Firms – Market Interventions Payments.  

Webb told attendees that the FCA is actively reviewing data provided by the sector to identify those most likely to be in financial risk and questioning the steps taken by at-risk firms to safeguard customers’ funds and manage the risk that they run out of runway.

The event, attended by over 250 industry delegates, delved into other key regulatory themes for payment and e-money institutions. The panel discussed the importance of enhancing fraud-detection measures and developing systems to be able to handle reimbursement claims in cases where the firm has sent or received funds resulting from a scam. The reimbursement requirement along with a requirement to implement a system for customers to be able to confirm that the beneficiary account is in the name of their intended beneficiary, known as ‘confirmation of payee’, will come into force for most payment and e-money institutions from October 2024.

The need to be well-advanced in testing operational resilience scenarios and to have submitted the first annual assessment of the implementation of the Consumer Duty in the business in 2024 was also discussed by the panel which included industry guests Millie Richardson, CEO of AFEP, Hugo Pires, Director of HSBC Innovation Bank as well as fscom experts Heather O’Gorman, Philip Creed and Rick Seehra.

The overarching message was clear – a proactive and well-prepared approach to the risks in your business is imperative in navigating the expectations of an increasingly tough regulator, especially in safeguarding client money, addressing Consumer Duty, wind-down planning, anti-money laundering, and ensuring cyber security and operational and financial resilience.


About fscom

fscom is an award-winning specialist consulting firm providing governance, risk and compliance solutions to financial services institutions in the UK and Ireland.

We are a firm of deep domain experts who specialise in the fund and asset management, banking, payments, crypto, and capital market sectors.

Our senior team is a unique mix of experienced consultants, ex-regulators, ex-bankers and former in-house compliance experts who hold senior positions with leading compliance related industry associations and provide our clients with in-depth regulatory insight and industry best practice in all areas of financial services regulation to include authorisation, audit, financial crime, cyber security, and regulatory due diligence.


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