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Last month, we hosted an esteemed group of 18 legal and compliance professionals from across the UK payments and crypto space, for an evening of fine dining and deep diving into the future payments compliance landscape.

The interesting format consisted of each of the three courses being paired with a discussion topic, resulting in a relaxed, open atmosphere, where guests felt comfortable sharing their thoughts and perspectives. In this blog, we reveal the key takeaways from the evening’s discussion.

Starter: Payments Compliance Challenges in 2024

We asked the group about their biggest challenges and which new regulations will demand more of their focus this year.

It’s probably no surprise that Consumer Duty has been a huge focus, with some teams still figuring their way through it, especially where older regulations may be contradicted by the “good outcomes” prescribed by the Duty. The general consensus was that this was, and still is “massive”, and many are eager to see how the FCA enforces against non-compliant firms. Adjacent to this, financial promotions rules for both crypto and BNPL businesses is something that will continue to require focus and some even anticipate further developments around this.

Many in the room also carried EMEA responsibilities, meaning PSD3/PSR and MiCA are the big regulatory topics for them in 2024. The general sentiment is that this should make things less complicated given the general harmonious nature of these new regulations. Others also felt that even though these are regulations (and not directives), some European Member States will go above the minimum requirements, note Germany’s approach to GDPR as an example of this.

Onboarding, particularly for those servicing merchants or working in the B2B and crypto space, is a constant point of concern, it is slow and cumbersome, especially given the consequences of getting it wrong and potentially facilitating money laundering and terrorist financing, however, if they say no to a business they “should” have onboarded, they’re losing revenue, so it’s a balancing act, but a tough one, with seemingly no current workaround to make this faster, with the risks being too high to apply automation.

The overwhelming biggest challenge everyone cited for the year ahead is the increasing threat of the ever more sophisticated approach to financial crime, especially APP fraud and account takeover. This continues to demand more resources, and is putting teams under pressure to find new ways of preventing fraud, which is forcing them to seek more for the regtech community (more on that in the dessert).

Main Course: Adapting to the Evolving Regulations

We asked the group what strategies they employ to manage international compliance risk in the constantly evolving regulatory environment.

Here there was a clear split between those who touch and/or provide custody of a customer’s money and those who do not. Focusing on the former, the typical response from this group is that the approach is very manual and people-first. There is an important distinction between two types of approaches within this group, however. Many use local country compliance teams for tracking local laws and feeding into a centre of excellence, whereas others use a solitary central team responsible for monitoring multiple jurisdictions without the benefit of local knowledge from local teams. After listening to ������ϲʿ�����¼’s approach of only using primary, verified sources, the reaction was enthusiastic, especially given our employment of people to do the work, and not solely relying on automation.

Dessert: Leveraging Technology

We asked the group what innovations they would like to see from the regtech space and challenges they face when seeking executive sponsorship for new solutions.

On the first point, given the prior mentioned challenges around financial crime, top of everyone’s wish list was either a tool that can reliably identify deep fakes, or help them take a more automated and reliable approach to transaction monitoring, because whilst there are solutions out there, all seem to have their limitations.

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