The new breed of seamless, secure cashflow emerges:
Ensuring your organisation is prepared for the payments revolution
With Government regulations around secure payment processes evolving, firms across the Finance sector must develop their IT infrastructure in response.
We make payments, large and small, every day of our lives. From paying our bills and making payments to friends online, to the large-scale bank transfers that help business flow. Money changes hands through a wider range of channels and platforms than ever before, to the extent the days of cash-in-hand being the default payment model are a fading memory for many of us. The convenience and flexibility can’t be disputed, but as with any emerging technology, the new flows of data must be given careful consideration, ensuring businesses and customers alike can rest assured that their money will remain secure throughout every stage of every transaction.
As is the case throughout the modern, interconnected world, regulations are evolving within the industry, establishing a new standard of security for payment processes across every channel. At the time of writing, the following measures are all in progress[1]:
As part of its Future Regulatory Framework Review, the UK Government plans on phasing out Payment Services Regulations 2017 (PSR’s) and Electronic Money Regulations 2011 in favour of new regulations, more suitable for the current financial and digital landscapes.
A deadline of 31st October 2024 has been set for new rules within the PSR’s regarding the confirmation of payee services by direct and indirect participants in Faster Payments and the Clearing House Automated Payment System (CHAPS), with updates also expected around Authorised Push Payments (APP) and fraud reimbursement.
The Financial Conduct Authority (FCA) is in the process of strengthening regulations around the safeguarding of customer funds, which is likely to involve a Client Asset Sourcebook (CASS) that will supplant the high-level rules included in the PSR’s.
HM Treasury will be updating the payment service contract termination rules within the PSR’s, with a view to strengthening consumer protection.
The Joint Regulatory Oversight Committee continues to make progress along its roadmap for open banking (i.e. the practice of providing third-party providers of financial services with secure access to data from banks and other financial institutions via the use of API’s), in parallel with the Government’s own regulatory frameworks and smart data schemes.
[1] https://thepaymentsassociation.org/article/payments-regulation-in-2024-a-year-of-evolution/
It’s certainly a lot to take in, and there will be more to consider in the years ahead as the regulatory landscape continues to evolve. The specific preparations financial services organisations will need to make will vary, depending on their current platforms, systems, and processes - all of which must be brought in line with the new regulations via modification or replacement, as appropriate.
A proactive approach to tackling these challenges is therefore vital. Put simply, the further in advance firms can achieve compliance with the anticipated regulatory changes, the easier it will be to minimise the risks associated with non-compliance, or better yet, avoid them altogether.
This will require the support of a technology partner with a proven record of executing complex digital transformation projects for financial services organisations. That’s where we come in…
Through our ongoing work with numerous financial firms, the team at Exponential-e are already deeply familiar with the shifting complexities of the sector’s regulatory landscape and continue to develop our solutions to ensure the very highest levels of security and compliance are inherent in the design. There are multiple dimensions to this, including the high-performance connectivity that underpins seamless transfers, resilient, scalable storage, bespoke Cloud transformation (including next-gen hybrid solutions), and an approach to cyber security and remediation that not only protects against the latest threats, but also ensures critical data and infrastructure can always be restored as quickly as possible, if necessary.
We are already actively working with leaders across the sector to not only fulfil their new compliance obligations, but also take the opportunity to deliver systems that offer the kind of leading-edge security and resilience the sector is justly renowned for - whatever form that might take. In this way, we aim to not only weather the immediate challenges, but build consumer confidence in the sector, helping drive a new standard of best practice that ensures every transaction is a secure, seamless one.
If you’re concerned about any of the new regulations we’ve looked at here, and how the payments revolution may affect your unique digital journey, don’t hesitate to get in touch.
