The payments and crypto-assets sectors are a focal point for regulatory actions to prevent financial crime, particularly fraud and money laundering.
Many firms operating in these sectors in the EU and U.K. are already subject to detailed regulatory requirements, and those are likely to be broadened over the coming years.
Parts of the payments sector are also systemically important and the potential impact upon financial stability of their failure means that this aspect will continue to be at the forefront of regulatory priorities for the foreseeable future.
There is a growing perception among regulators and policymakers that the sector has previously been too lightly regulated and, as a result, insufficient attention was given to the protection of consumers, the safeguarding of funds, the implementation of adequate anti-money laundering and financial crime controls, and the independence, fitness and propriety of owners and controllers.
Firms often need to make difficult trade-offs between user experience, risk management and data privacy. This article discusses how regulation and supervisory actions by regulators are affecting those trade-offs.