Great Britain’s chief financial watchdog has a message for FinTech startups operating in the UK: stop comparing yourself to banks.
The Financial Conduct Authority (FCA) this week ordered more than 300 FinTechs to contact their customers to remind them of the risk of keeping money in accounts that aren’t protected by the Financial Services Compensation Scheme, which insures deposits.
The Financial Times reported Wednesday, May 19, the FCA has given the companies six weeks to take action, while also warning that some firms are “misleading” consumers about how much regulation their products receive.
The concerns set out in the letter to FinTechs demonstrate the “growing anxiety among regulators” regarding companies following the collapse of German payments firm Wirecard, the news outlet reported.
The letter was signed by Paul Roe, who heads the FCA’s payments supervision office, and sent to the leaders of all companies operating under an “e-money license,” from tiny startups to major players such as Revolut and Wise.
Companies that have these licenses can provide basic banking services like money transfers, but are barred from lending out customer deposits, and must store these funds in guarded accounts at a fully-licensed bank.
The FCA strengthened its rules for e-money companies in 2020, but Roe says the organization is still worried that many of these firms aren’t properly disclosing “the differences in protections between their services and traditional banking.”
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
Featured News
EU Brands Apple’s iPadOS as Gatekeeper in Tech Crackdown
Apr 29, 2024 by
CPI
Brussels to Investigate Meta Platforms’ Handling of Disinformation on Facebook and Instagram
Apr 29, 2024 by
CPI
OpenAI Faces Privacy Complaint in Vienna Over ChatGPT’s Data Handling
Apr 29, 2024 by
CPI
EU Launches Investigation into Czech State Aid for Digital TV Operators
Apr 29, 2024 by
CPI
UK Probes Lindab’s Acquisition of HAS-Vent Amid Fears of Market Monopoly
Apr 28, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI