Safeguarding and Reconciliation Readiness in the UK Payments Sector

At the Money20/20 Europe event, the discussion around financial compliance focused heavily on the shifting regulatory landscape in the United Kingdom. Roger Binks, Chief Commercial and Marketing Officer at Kani Payments, discussed the company’s recent research into how payment firms are handling new Financial Conduct Authority (FCA) expectations. As regulatory scrutiny increases, moving from manual, periodic oversight to fully automated daily operations has become a critical milestone for payment providers.

1. Context and Intent: Sourcing Ground-Level Market Insights

Kani Payments commissioned the “Safeguarding Readiness in the UK Payments Sector” research to better understand the operational realities facing payment firms on the ground. Because Kani already manages an established portfolio of customers within the payments sector, the firm regularly uses direct feedback from its clients and industry contacts to guide product development. The survey was designed to gather real-world data to help Kani refine and improve its technical solutions.

2. Industry Preparedness and the Confidence Gap

The research revealed a significant gap between how ready firms claimed to be and their actual ability to pass a regulatory audit. While the FCA’s new Client Assets (CASS) style safeguarding regulations require a shift to daily reconciliations, many firms are still lagging behind.

The data highlighted a clear contradiction in the market:

• The Frequency Disparity: A surprising number of payment firms are still running reconciliations on a weekly or monthly basis, rather than performing them daily as required by the updated regulations.

• The Verification Drop: Although several firms initially claimed to be fully compliant with the FCA’s new standards, their confidence dropped significantly when asked if their records would remain completely accurate under close regulatory scrutiny.

• Audit Vulnerability: This gap shows that while companies want to meet compliance standards, they lack the operational certainty required to be genuinely audit-ready on a day-to-day basis.

3. The Shift from One-and-Done Projects to Embedded Operations

Binks noted that the biggest risk facing payment providers over the next 12 months is treating safeguarding compliance as a temporary project rather than an ongoing operational requirement. Many industry conversations focus on achieving compliance as a “one-and-done” task.

In reality, successful safeguarding requires a permanent change in how a company operates. Compliance must become an embedded, continuous workflow that runs daily. Kani’s solution addresses this issue by helping firms transition to automated daily tracking, which saves valuable time and provides assurance that internal records are accurate and fully compliant.

4. Strengthening Infrastructure: Process Mapping and Automation

For organizations that still need to improve their safeguarding systems, Kani recommends a practical, step-by-step approach to identify and eliminate operational weaknesses.

• Map the End-to-End Journey: Firms should begin by drawing out their entire current reconciliation process on paper to visualize how data moves across the organization.

• Identify Breakpoints and Single Points of Failure: Teams must locate system gaps, such as disconnected software programs or over-reliance on a single employee who holds exclusive knowledge of a specific process configuration.

• Commit Completely to Automated Solutions: Organizations need to transition from manual entry to automated processing and stick with it, moving past operational discomfort to trust automated systems for daily reporting.

Key Highlights from Roger Binks:

• The Reconciliation Delay: A significant number of payment firms are failing to run daily reconciliations, sticking instead to outdated weekly or monthly schedules despite strict new FCA guidelines.

• The Compliance Confidence Gap: While many organizations claim to be aligned with the new regulations, their confidence drops sharply when evaluated on actual audit readiness and data accuracy.

• The Project Mindset Risk: Treating safeguarding as a temporary, one-and-done project is the biggest operational threat to providers; it must be treated as a permanent, daily business process.