The FCA is accelerating payments reform for 2026, tightening rules on safeguarding, fraud, and consumer protection while pushing innovation across open banking and AI.
The payments sector is already gearing up for major changes (see our Insights article), and the FCA’s Regulatory Priorities report is accelerating that pace. The report—which replaces individual portfolio letters of the past—sets out how the FCA plans to support the National Payments Vision while clamping down on poor practice. Key priorities for 2026 include:
- Reforming regulation: the FCA will be working with HM Treasury to overhaul and future-proof the legal framework for the sector – including looking at what’s needed to support agentic AI in payment services models. Other plans include setting the scene for longer-term regulation of open banking, establishing a Future Entity, and working with industry to explore how best to integrate stablecoins and other tokenised payments into the regulatory framework.
- Protecting customers: firms are expected to embed the Consumer Duty into their operations and address compliance gaps immediately. Given the sector’s past and projected growth, safeguarding customer funds is seen as vital. Firms must be ready to meet the Safeguarding Supplementary Regime as soon as the rules take effect in May 2026.
- Tackling fraud: financial crime is an ever-present concern. The FCA intends to tighten the net—especially on money laundering and APP fraud—and will work with industry, other regulators and law enforcement agencies to do so. Meanwhile, firms need to begin preparing for the new incident-reporting rules before their 2027 implementation.
This push for innovation and growth runs in parallel with a strong supervisory message. Protecting the integrity of markets and the financial sector as a whole is a top priority, and the industry must play its part. The regulator clearly expects firms to take swift action to address compliance gaps, review their anti-fraud procedures, and implement robust risk management and operational resilience measures. Boards and chief executives take note!
