As the FCA publishes its new safeguarding regime, RSM UK says this represents a major regulatory shift that will require significant planning and investment from payment firms in order to meet the compliance deadline. The new regime aims to protect consumers, by ensuring that if a payment firm fails, consumers are protected and will be refunded in full as quickly as possible.

For payment firms, the new rules mean that, from May 2026, their safeguarding audits must be performed by a qualified accountancy firm. This represents a significant change to the current rules and means some payment and e-money firms will need to source alternative audit partners, as many smaller boutique companies will no longer be eligible to complete safeguarding audits.

Catherine Brittain, financial services partner at RSM UK said: “This is not just a policy tweak, this is full-scale operational change. The FCA’s nine-month implementation period will be extremely tight for many. We’d recommend payment firms discuss these changes with their advisors as soon as possible to ensure they are qualified. Firms are urged to start taking steps now to ensure they are able to implement all necessary changes ahead of the May deadline.”

Key areas firms need to consider include:

• Daily safeguarding reconciliations (internal and external).
• System upgrades to enable segregation and reporting under the new expectations.
• Governance enhancements, including live resolution packs.
• Revised treasury and third-party risk frameworks.
• Board-level engagement and training.

Catherine Brittain added: “The window to act is open now, and it is narrow. All these elements must be scoped, funded, and executed. Firms that delay until the rules become binding put themselves at risk of falling short of compliance.

“The requirement that safeguarding audits must now be performed by a qualified accountancy firm is particularly significant, as many smaller boutiques will no longer be eligible, reducing the number of providers in the market. We are anticipating that qualified accountancy firms will become extremely busy as a result of this regulatory shift and may face capacity constraints.”

RSM UK recommends firms should start considering the following now to ensure they are fully prepared for the new regime:

• Gap analysis: Benchmark current safeguarding practices against the new rules and reporting metrics to identify any gaps or areas of weakness.
• System automation: Build new reconciliation processes and FCA-ready reporting pipelines.
• Third-party risk review: Formalise due diligence processes and set diversification limits with board approval.
• Audit readiness: Engage a qualified auditor, conduct dry-runs, and close identified control gaps.
• Resolution pack development: Create dynamic, easily accessible packs integrated with existing governance tools.
• Board education: Ensure directors understand their obligations and can link safeguarding to Consumer Duty outcomes.

Related news