VIXIO PaymentsCompliance hosted a webinar looking ahead at some of the trends the payments industry should expect in 2021. We hosted Laura Murphy, vice president, regulatory, at Paysafe Group, and Michael Magrath, global regulations director at OneSpan, to discuss some of the results of a recent VIXIO survey put to compliance, risk and legal professionals.
The trends discussed were a preview to a wider survey, which VIXIO will publish at the start of 2021.
Operational resilience top of the list
Operational resilience was a major theme of the session, with 68 percent of survey respondents saying it will be a priority over the next 12 months. We expect it to continue to be a priority for the regulators as well.
Operational resilience is hugely complex and will be on the agenda for the next few years, said Paysafe’s Murphy.
“Stronger, tighter anti-money laundering controls, good strong measures for data breach prevention, fraud prevention, strong cybersecurity management; all of these are jigsaw pieces in a bigger puzzle that plays a role in operational resilience,” Murphy said while speaking at the webinar, Payments 2021: From Chaos to Operational Resilience.
“Operational resilience will take on a new meaning going forward. As consumers increasingly rely on non-bank payment service providers for essential services, regulators are assessing their broader impact on the stability of the financial system — something that payment institutions didn’t have to worry about.”.
The evolution of the compliance function
There has been a shift towards firms and businesses considering compliance as a competitive advantage and business partner opportunity, with the compliance function potentially becoming more commercially driven, the panel said.
“It is now the status quo,” said Murphy. “What you’re expected to do is find a balance between providing clear and precise advice to your business but also overlaying the commercial picture,” she said, suggesting that people should not advise from a vacuum, or within an ivory tower.
As regulations are being put forth, regardless of the pandemic, organisations must try not to do it alone, said OneSpan’s Magrath.
“The good news is that 84 percent of survey respondents indicated that they will leverage regulatory compliance to deliver competitive advantage over the next 12 months. This continuing shift marks a milestone in the evolution of the compliance function and those who adapt will come out on top.”
Managing political uncertainty
Industry collaboration has been important in dealing with political uncertainty, Murphy said.
“For payments, even before COVID-19, nobody could do it alone. It is very important that all of the players, large and small, fintechs and banks, are working together to shape things and understand political uncertainty,” she said.
Electronic money institutions and payment institutions have had to deal with a bleak future on passporting due to Brexit, she continued. “At least from a Paysafe perspective, we began planning back in 2016, once we knew that we were leaving the EU.”
In terms of cross-border payments regulation, the UK indicated that it may want to take a slightly different approach, she continued. “I think that’s going to be increasingly complex for companies who have a number of different licences to try to navigate.”
“Seventy-eight percent of survey respondents indicated that they don’t like any kind of uncertainty, be it legal, regulatory or political. The UK ranked high as a jurisdiction for growth as well as difficult to navigate, mainly due to the uncertainty around Brexit, but companies are not leaving despite the challenges.
The reality is, organisations aren’t leaving mature markets, rather they are looking at how they can get more growth out of them before venturing further afield.”
The full webinar, Payments 2021: From Chaos to Operational Resilience, is now available to watch on-demand here.