On 26 June 2025, the Financial Conduct Authority (FCA) published its findings following a multi-firm review of risk management and wind-down planning at e-money and payments firms.

Key finding

The FCA’s key finding following the review is that risk management frameworks and wind-down plans in firms remain underdeveloped.

None of the firms the FCA reviewed fully met its expectations, and in particular were not following the guidance in Finalised Guidance 20/1 – Our framework: assessing adequate financial resources.

There are three main areas for improvement:

  • Enterprise-wide risk management frameworks. Staff in operational roles generally managed their activities appropriately but received limited oversight and challenge. Risk appetites were not clear and were not always based on the activities of the business. Financial resources levels were determined using judgement instead of quantitative methods such as stress testing. Several firms did not identify and assess all material risks relevant to their business model, articulate a risk appetite or hold adequate resources.
  • Liquidity risk management. For many firms in scope of the FCA’s review, liquidity risk has the potential to cause material harm if not managed appropriately. The FCA saw weaknesses in identifying and assessing the impact of stress events. Firms rely on cash balances to mitigate liquidity risk without appropriate analysis such as stress testing to assess whether they have sufficient resources. The FCA encourages firms to quantify their liquid resources in line with their risk appetite and set adequate liquidity triggers for wind-down.
  • Consideration of group risk. Group risk arises from the relationships and interlinkages between entities, affecting financial and non-financial resources available to the regulated firm. Firms should identify all material sources of group risk and tailor risk management policies accordingly.

Next steps

The FCA states that it expects firms to review their arrangements against its findings and make any necessary improvements.