The UK Financial Conduct Authority has sent letters to almost 300 payment companies calling for measures to eliminate unacceptable risks to consumers and the integrity of the country’s financial system.
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The FCA has warned firms engaged in the provision of payment services that in case of ignoring measures to eliminate risks, these companies will be closed by the decision of the regulator. These letters were received by 291 representatives of the British payment services market.
FCA Director of payments and Digital Assets Matthew Long said that the supervisory authority welcomes the introduction of innovative solutions and competition in the UK payment sector. But he noted that many firms operating in this industry have not provided proper control, which is why there are risks both for each individual consumer and for the entire financial system in terms of its integrity.
The letters separately draw attention to the most common shortcomings in the work of companies in the payment sector. Representatives of the regulatory body note that firms of this profile use ineffective methods of reconciliation. The letter also draws attention to the fact that many companies do not have the tools to determine which funds should be protected as a matter of priority.
Matthew Long says that many British payment firms are not able to properly manage liquidity risks. He also noted another problem of the payment industry, which is the inability to resolve the issue of the expediency of holding capital above regulatory requirements.
The regulatory body, in letters sent to the firms, reproaches them for the lack of adequate mechanisms to combat money laundering and circumvent sanctions. Another claim is the insufficiency of anti-fraud measures.
The FCA declares its intention to actively monitor the situation in the payment sector in the future and apply drastic measures against those firms that do not meet the requirements of the regulator.
As we have reported earlier, FCA Takes Action Against Fraudulent Promotions.
Serhii Mikhailov
Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.
