The Latest in Payments Regulation | UK Finance Regulatory Roadmap Series IV

2 min read

FullCircl Commentary:
The Latest in Payments Regulation

UK Finance has brought back its popular Regulatory Roadmap webinar series. We joined live to bring you all the highlights on the key topics and issues impacting UK B2B financial institutions. 

Read on as we delve into its recent payments regulation webinar.

Regulatory change has been a dominant theme in the payments sector in recent years.

The payments landscape is fast-moving. As the use of payments, payment volumes, and digitalisation of the economy evolves, the pace of change is not likely to slow as we approach 2023. Regulators are being forced to move quickly and adapt in ways that support innovation and competitiveness while protecting financial stability and resilience.

The session explored the key headlines in payments industry regulation including the new consumer duty, Confirmational of Payee (CoP) extension, account-to-account transaction standards, open banking, and the forthcoming changes to the Payment Services Directive (PSD2).

Here are our three highlights:

Know your Supplier (KYS) is more crucial than ever

Under the scope of the new consumer duty, an issuer will be responsible for ensuring agents and distributors comply with the consumer duty of care requirements. Issuers will need to examine how every part of the supply chain impacts the consumer, even if indirectly, and they will need to develop monitoring and data collection capabilities to continuously monitor the impact on consumer outcomes.

In addition, critical third parties will also be brought into the scope of regulatory supervision – from technology providers and data outsourcing to communications providers and beyond. Payment service providers increasingly rely on third-party services, and regulators are now addressing the systemic risks posed. The Financial Services and Markets Bill sets out a statutory framework for overseeing the resilience of services third parties provide, that many financial firms rely on.

Onboarding providers is going to get a whole lot tougher

Currently, the CoP framework covers 92% of transactions in the market, but the extension aims to bring into scope 98% coverage. This will mean onboarding around 400 more providers, with the aim of reducing authorised push payment (APP) fraud and accidentally misdirected payments, and providing certainty to a greater number of payment system users that they will have CoP protections when they make and receive payments.

This represents a huge undertaking, with current average onboarding times of around 9-12 months. Anything that can be done to reduce onboarding times will be welcomed by the industry.

Data is more important than ever

Whilst not a discussion topic in its own right, as we listened it become obvious across all the themes discussed that as the regulatory landscape in payments evolves rapidly, the value of data is greater than ever.

From onboarding at scale, ensuring supply chain resilience to improving continuous compliance, delivering on risk assessment and fraud management requirements, as well as meeting customer expectations and consumer protection requirements, driving efficiency, and delivering innovation, the value of data is immense.

So how can FullCircl help?

Read our guide to how Customer Lifecycle Intelligence will help power the next generation of payment innovation, or get in touch with a member of our team to understand more about how we can help you get ahead of the new regulatory landscape.

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