Payments and e-money firms: Central Bank sets expectations

The Central Bank's message is clear: innovation remains welcome, but firms will be expected to demonstrate that growth is supported by effective governance, robust safeguarding, strong financial crime controls, operational resilience and a relentless focus on consumer interests

With the sector continuing to expand rapidly and the Central Bank supervising 62 firms, the speech provides an important indication of regulatory expectations for 2027 and beyond.

Three themes shaping supervision

1. Trust and consumer interest

The Central Bank reinforced that financial services are built on trust and that authorisation brings a responsibility to act in consumers' best interests. The regulator highlighted that misconduct, weak controls or prioritising commercial objectives over customer outcomes can quickly erode confidence in the sector.

2. Resilience through shared responsibility

• The speech outlined three pillars of resilience:
• A robust regulatory framework
• Risk-based and forward-looking supervision
• Firms taking ownership of their own risks and controls

The Central Bank emphasised that firms cannot become complacent. Control frameworks must continually evolve to keep pace with changing risks and business models.

3. Innovation tempered by capacity

While the Central Bank welcomes innovation, including developments in AI, distributed ledger technology (DLT), automation and stablecoin-related activities, it cautioned firms against pursuing growth opportunities without adequate operational, financial and governance capabilities. Boards are expected to challenge strategic ambitions and ensure firms can safely manage associated risks.

Key supervisory priorities

The speech highlighted five areas likely to receive significant supervisory attention:

1. Safeguarding of customer funds

Safeguarding remains a non-negotiable priority and continues to be a major focus area for payments supervision. Firms should expect ongoing scrutiny of safeguarding arrangements and customer money controls.

2. Financial crime

The Central Bank noted that the speed and cross-border nature of payment services create potential opportunities for money laundering, fraud and other financial crime. Firms are expected to maintain robust financial crime frameworks and treat AML/CFT compliance as a core risk-management issue rather than a regulatory exercise.

3. Consumer protection

The revised Consumer Protection Code was identified as a cornerstone of the regulatory framework. Supervisors will be assessing how firms have embedded the Code's principles into governance, culture, decision-making and risk management processes.

4. Operational and cyber resilience

The Central Bank highlighted increasing concerns regarding cyber risk and the impact of emerging technologies, particularly AI. Firms should demonstrate rigorous governance, accountability and oversight over technology deployment and associated risks.

5. Governance and risk management

Strong governance remains an overarching expectation. Boards and senior management are expected to actively oversee risk, challenge strategic decisions and ensure control frameworks remain proportionate to the firm's scale and complexity.

What firms should do now

Boards and senior management should use the speech to challenge whether their governance, resources and controls remain appropriate as their businesses evolve.

Practical steps include:

• Test safeguarding arrangements: Assess whether controls operate effectively and address any gaps.
• Refresh financial crime risk assessments: Ensure they reflect current products, customers, markets and transaction patterns.
• Review consumer protection: Assess how the revised Consumer Protection Code is reflected in everyday decisions, culture and customer outcomes.
• Evaluate operational and cyber resilience: Test preparedness for disruption and review oversight of AI and other emerging technologies.
• Challenge growth plans: Confirm that resources, financial capacity and risk management can support planned expansion.

How we can help

Our financial services consulting team can help you assess your current arrangements, identify gaps and prioritise practical improvements across safeguarding, financial crime, consumer protection, resilience and governance.

Contact our team to discuss your priorities and how to prepare for your next supervisory engagement.