Included in this issue of InContact: PSR report and consultation on authorised push payment scams; New FCA webpage on model driven machine executable regulatory reporting; Mobile lender WeLab receives $220 million in financing and more...


PSR report and consultation on authorised push payment scams

The Payment Systems Regulator (PSR) has published a paper containing a report and consultation on authorised push payment (APP) scams (CP17/2).
The report details the work the PSR has done in the past year to reduce the harm to consumers from APP scams. Specifically, progress has been made in the following areas:

  • Statistics. The industry (as represented by UK Finance) has published the first set of statistics on APP scams, and from 2018 it will collect and publish more detailed data.
  • Best practice standards. The industry has now developed best practice standards that payment service providers (PSPs) will follow when a victim reports an APP scam. This should improve victims' experiences and PSPs' response times. A press release (dated 7 November 2017) from UK Finance, responding to the PSR's paper, contains details about the APP claim reporting standards. The FCA has indicated in a related press release that it will actively monitor the adoption, implementation and impact of the standards.
  • Data. The industry has developed a common understanding of what information PSPs can share under current law when responding to APP scam claims. The industry will be seeking to ensure that PSPs can continue to share this information under future legislation and will assist in work to facilitate the recovery of victims' funds.

The PSR is seeking feedback on how a voluntary contingent reimbursement model should be implemented and administered by 12 January 2018. If a model is introduced, the PSR plans to implement it by the end of September 2018.

PSR, 7 November 2017

New FCA webpage on model driven machine executable regulatory reporting

The FCA has published a new webpage on model driven machine executable regulatory reporting. One of the key technology areas on which the FCA is focusing is the development of solutions to the increasing challenges faced by financial institutions in implementing their regulatory reporting obligations. Along with the Bank of England, the FCA is exploring how technology can be used to link regulation, compliance procedures, firms' policies and standards, together with firms' transactional applications and databases. If successful, the FCA believes this opens up the possibility of a model driven and machine readable regulatory environment that could "transform and fundamentally change" how the financial services industry understands, interprets and then reports regulatory information.

FCA, 2 November 2017

FCA publishes consultation on mission document on future approach to consumers

The FCA has published for consultation a document outlining its future approach to consumers. The document aims to add to the FCA's Mission 2017 which was published in April 2017 through greater depth on how the FCA approaches its work and fulfils its objectives in relation to protection of consumers. The document sets out the FCA's vision for well-functioning markets, its priorities, and how it intends to find and remedy harm.

FCA, 6 November 2017

FSB report on artificial intelligence and machine learning in financial services

The Financial Stability Board (FSB) has published a report considering the financial stability implications of artificial intelligence (AI) and machine learning in financial services. The FSB notes that financial institutions are increasingly using AI and machine learning in a range of applications across the financial system. This includes assessing credit quality, pricing and marketing insurance contracts, automating client interactions, analysing the market impact of trading large positions, optimising trading execution, and regulatory compliance.

FSB, 1 November 2017

Revolut applies for European banking licence

London-based Revolut has applied for a European banking licence as it prepares to start offering deposit and credit services. App-based Revolut launched in 2015, initially focusing on prepaid current accounts before opening up to companies this year. The firm claims 900,000 users across Europe and has recieved $90 million from investors including Index Ventures and Ribbit Capital. As it bids for its European banking licence, the firm has been building up its relationship with the central bank in Lithuania - a country which has been aggressively pushing itself as a fintech-friendly destination. Revolut expects to have the licence in the first half of next year when it will immediately begin offering overdrafts, personal loans and term deposits in select markets. The banking licence will also enable Revolut to protect customer's funds up to €100,000. Meanwhile, the startup also says that it has begun building its own payment processor.

The Independent, 8 November 2017


EBA publishes official EU language translations of guidelines on authorisations and registration under PSD2

The EBA has updated its webpage on its final guidelines on the required information to be given by entities aiming to obtain authorisation or registration under PSD2. These include an English language version.

EBA, 8 November 2017

FATF updates guidance on AML and CTF measures and financial inclusion with CDD supplement

The Financial Action Task Force (FATF) has published a revised version of its guidance on anti-money laundering (AML) and counter-terrorist financing (CTF) measures and financial inclusion. The guidance aims to help the design of AML and CTF measures that further financial inclusion but do not detract from laws in place to hinder financial crime.

FATF, 3 November 2017

FATF finalises information sharing financial institution guidance

The Financial Action Task Force (FATF) has published guidance for financial institutions on information sharing. The guidance considers general issues relating to information sharing, including legal issues, information sharing within financial groups, information sharing between institutions not in the same group, and information sharing that goes beyond FATF recommendations.

FATF, 3 November 2017

Mobile lender WeLab receives $220 million in financing

Alibaba, Credit Suisse, and the World Bank's International Finance Corporation have joined in a $220 miliion Series B and debt financing round for Hong Kong-based mobile lender WeLab. Founded in 2013, the mobile lending company has processed applications for US$28 billion in loans to 25 million users across Hong Kong and China. WeLab analyses unstructured mobile data within seconds to make credit decisions for individual borrowers. The company also licenses its technology to banks and telecommunications companies. WeLab founder and CEO Simon Loong says the funds will be used to advance its technology platform and to move into new products and geographies.

WeLab, 8 November 2017

Key Contacts

William James

William James

Partner, Commercial
London, UK

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