In a recent letter sent to the CEOs of payments firms, the UK Financial Conduct Authority (FCA) urged the leaders to strengthen governance, oversight, and leadership to address regulatory weaknesses.
The FCA acknowledged that the sector has made some progress on these issues, but stressed the need for further action. "High standards instil trust and confidence, which are essential for innovation, competition, growth, and the UK's international competitiveness," the FCA wrote. “We remain concerned that there are still risks of harm to consumers and financial system integrity.”
The regulator put forth three key outcomes that it believes to be fundamental to achieving good customer outcomes: competition and innovation, financial system integrity, and customer fund safety. The FCA also laid out a number of priorities within these objectives, including embedding the Consumer Duty, tackling financial crime, meeting resilience requirements, and managing prudential risks.
The letter emphasized the importance of effective governance, reporting, operational oversight, and risk management in achieving these goals. "Weaknesses in these areas are a root cause of many of the regulatory issues we see in the portfolio," the FCA wrote.
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