Most UK payments firms not ready for new FCA safeguarding rules

With less than six months until new UK safeguarding regulations come into force, most payment and e-money institutions say they are still in the early stages of preparation or have not yet begun, according to new poll findings released by Clear Junction and Howden.

From 8 May 2026, firms must comply with updated Financial Conduct Authority (FCA) safeguarding rules that move long-standing guidance into binding regulation. The rules require institutions to keep customer funds separate at all times, complete daily reconciliations on working days, maintain clear documentation, and undergo formal audits of their safeguarding arrangements. These audits must be submitted directly to the FCA.

A live poll of 68 payments industry professionals at a London event hosted by Clear Junction and Howden showed that only 7 per cent of firms consider themselves fully ready. Fewer than 22 per cent say they are in the advanced stages of preparation, while 78 per cent are either in the early stages or have not started.

Firms lag on UK safeguarding readiness

Attendees, which included senior figures across payments, legal and compliance, highlighted next-day reconciliations as the most challenging operational requirement. Ensuring client funds are matched and accounted for by the following business day was cited by 58 per cent of respondents as the biggest friction point.

Managing UK and EU changes without duplication, securing insurance wordings that meet FCA expectations, and improving the quality of monthly management information were also identified as hurdles.

Teresa Cameron, Group CEO of Clear Junction, said: “Reconciliations are always at the top of the leaderboard, but they are only one part of the challenge. Firms also face the short supply of safeguarding banks, the issue of liquidity, and the requirement to keep resolution packs as living, breathing documents.”

Alison Donnelly, Director at fscom, said: “The poll results chime with what we also hear from firms. Many are still at the early stages; some are starting to safeguard from scratch and asking when obligations start and end. More mature firms are figuring through D+1 calculations and reconciliations, and seeking interpretation advice on what constitutes a material breach and what ‘without undue delay’ really means.”

Speakers stressed that firms now need to translate regulatory requirements into workable routines that can withstand audit. Recommended steps include automating reconciliations, maintaining liquidity across 24-hour payment schemes, keeping resolution packs updated, preparing for safeguarding audits, and reviewing insurance clauses to ensure prompt payout on insolvency.

Clear Junction and Howden said they will continue supporting firms as they move from interpretation to full operational readiness ahead of the May deadline.