The Central Bank of Ireland has found a number of shortcomings in the work of companies that carry out their activities in the payment industry and the field of electronic money.
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The regulator found that firms in these industries have a number of shortcomings concerning the management system, risk management, and control of activities.
At the end of 2021, the central bank of Ireland sent a letter to payment companies and firms whose activities are related to the circulation of digital money, outlining expectations regarding their work. A little over a year later, the regulator published another letter signed by the director of supervision of credit institutions Mary-Elizabeth McMann. This time, the bank said that its expectations were not met sufficiently.
The letter says that the regulator still does not have full access to control over the processes taking place in the payments industry and the electronic money sector. The bank also notes that the intensity of the companies’ activities exceeds the possibilities of regulation, which is due to the shortcomings of management systems.
In the letter, special attention is paid to the statement of the fact that the ambitions of some firms aimed at solving strategic tasks exceed their capabilities and the scope of economic activity. Because of this, according to the bank’s experts, there are many risks.
To solve this problem, the bank will introduce a new rule in 2023. Firms that are obliged to protect users’ funds will undergo a special audit of their compliance with the protection requirements according to PSR/EMR. The new rule will be introduced in the second half of summer.
The Bank states that risk management systems should have a greater level of consistency with business strategies and goals. The regulator also notes that the management of firms should have in-depth knowledge of the technological risks they face.
The Central Bank of Ireland expects companies to consider the regulator’s conclusions after reviewing the letter.
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