FCA warns payment firms against taking “unacceptable risks”

In its letter, the regulator instructed businesses to build their financial reserves, eliminate potential money laundering and ensure they’re managed appropriately.  

This work is designed to deliver three outcomes that its set for payment firms, namely ensuring their customers money is safe, ensuring their firm does not compromise financial integrity and meet their customers’ needs, including through high quality products and services, competition and innovation.  

It comes as the FCA says it remains concerned that many payment firms do not have sufficient robust controls and as a result some present an “unacceptable risk” of harm to their customers and to the integrity of the financial system.  

Among its outcomes, it has set out a number of areas that need to be prioritised including safeguarding, prudential risk management, winding-down planning, money laundering and sanctions, fraud, governance and leadership, operational resilience and regulatory reporting.  

The FCA has said it expects firms to take “prompt action” to address these risks and ensure their customers’ money is safe – including if it fails – it has robust controls to prevent them being used for financial crime, they meet their customers’ needs, and have robust governance.