Navigating FCA Compliance in Fintech

The FCA regulatory landscape continues to evolve. For fintech companies, staying compliant while moving fast requires both technical solutions and organizational commitment.

Understanding the Regulatory Landscape

The Financial Conduct Authority (FCA) regulates over 50,000 firms in the UK. For fintech companies, the relevant regulatory frameworks typically include:

• Payment Services Regulations 2017 (PSRs) for payment institutions
• Electronic Money Regulations 2011 (EMRs) for e-money issuers
• Money Laundering Regulations 2017 (MLRs) for AML/KYC obligations
• Consumer Duty (2023) for customer outcome focus

AML/KYC: The Non-Negotiables

Anti-money laundering compliance isn't optional. Every regulated firm must implement a risk-based approach to customer due diligence, transaction monitoring, and suspicious activity reporting.

Key requirements include:

• Customer identification and verification at onboarding
• Ongoing monitoring of customer transactions
• Enhanced due diligence for high-risk customers
• Suspicious Activity Reports (SARs) to the NCA
• Staff training and awareness programs

Building Compliance Into Your Tech Stack

The most effective compliance programs are built into the technology from the start, not bolted on as an afterthought. Here's how we approach it:

1. Onboarding Workflows

Design your customer onboarding to collect compliance data naturally. Integrate identity verification providers (Onfido, Jumio) directly into the flow. Screen against sanctions lists in real-time before account activation.

2. Transaction Monitoring

Implement rules-based monitoring that flags suspicious patterns: unusual transaction volumes, rapid movement of funds, transactions with high-risk jurisdictions. Modern systems use ML to reduce false positives while catching genuine concerns.

3. Audit Trails

Every action that affects compliance must be logged with immutable timestamps. Who approved the account? What documents were verified? When was the last periodic review? Regulators expect complete traceability.

The Consumer Duty Era

The FCA's Consumer Duty, effective July 2023, represents a fundamental shift in regulatory philosophy. Firms must now demonstrate they're delivering good outcomes for retail customers across four areas:

• Products and services: Designed to meet customer needs
• Price and value: Fair relationship between price and benefits
• Consumer understanding: Clear, timely communications
• Consumer support: Accessible, responsive service

Practical Steps for Compliance

If you're building a fintech product, here's our recommended approach:

1. Map your regulatory perimeter: Understand which activities require authorization
2. Design with compliance in mind: Build controls into your architecture
3. Automate where possible: Manual processes don't scale and introduce errors
4. Document everything: Regulators expect evidence of your controls
5. Stay current: Regulatory requirements evolve; your systems must too

Conclusion

FCA compliance isn't a one-time project—it's an ongoing commitment. The firms that succeed are those that view compliance as a competitive advantage rather than a burden. Well-designed compliance infrastructure builds customer trust and creates a foundation for sustainable growth.