FCA Payments Regulatory Priorities 2026: Safeguarding, Stablecoins and the Agentic AI Question
Credit: McKinsey, What is a Stablecoin?
Context:
The FCA published its Payments Regulatory Priorities report on 25 March 2026, the final instalment of its new nine-sector annual reporting framework that replaces more than 40 individual portfolio letters. The report covers all firms authorised or registered under the Payment Services Regulations 2017 (PSRs) and the Electronic Money Regulations 2011 (EMRs).
The sector context is significant: open banking now serves over 16 million people and businesses in the UK, facilitating an average of 29 million payments per month. Electronic money institutions safeguarded approximately £26bn in customer funds in 2024, up from £11bn in 2021. Payment institutions safeguard an estimated £6bn per day. Against this backdrop, the FCA has identified persistent weaknesses in safeguarding, financial crime controls, and Consumer Duty implementation while simultaneously wanting to accelerate innovation in open banking, stablecoins, and AI-driven payments.
The report also marks a key structural moment: the FCA is progressing the consolidation of the PSR's functions into the FCA ahead of legislation, streamlining the regulatory environment for payments firms.
Rules and Guidelines:
Four priority areas are set out. First, preparing for the future: the FCA will continue policy work on open banking, stablecoins, and modernising payments regulation, including establishing the open banking Future Entity through workshops across summer and autumn 2026. Stablecoin final policy statements are expected later in 2026 following a March 2026 tech sprint. Critically, the FCA has stated it will review 'whether change or development of regulation is needed to support agentic AI payments', the most direct commitment to date that AI-specific payments rules may be required.
Second, Consumer Duty: firms must embed the Duty into all products, services, and processes on an ongoing basis. The FCA has identified gaps in transparency around international money remittance pricing and the treatment of vulnerable customers. Third, financial system integrity: firms must strengthen financial crime governance and controls, and prepare for PS26/2 incident reporting rules (effective March 2027). Fourth, keeping customers' money safe: the Safeguarding Supplementary Regime comes into force in May 2026. Firms that have not developed robust safeguarding arrangements, risk management frameworks, and wind-down plans face regulatory action.
Businesses Affected:
All firms authorised or registered under PSRs 2017 or EMRs 2011, including payment institutions, electronic money institutions, account information service providers, payment initiation service providers, and banks offering payment services.
Open banking providers and variable recurring payments (VRP) participants must engage with the Future Entity establishment process.
Fintechs and digital banks deploying or planning to deploy agentic AI in customer-facing payment flows, the FCA's signal that new rules may be needed is a significant regulatory horizon event.
Firms subject to the Safeguarding Supplementary Regime must be fully compliant from May 2026.
Next Steps:
Implement the Safeguarding Supplementary Regime before its May 2026 effective date. Review governance arrangements, wind-down plans, and ring-fencing of customer funds.
Conduct a Consumer Duty gap analysis specific to payment services, focusing on international remittance transparency and vulnerable customer treatment.
Engage with FCA's open banking Future Entity workshops and stablecoin sandbox cohort. Monitor the FCA's agentic AI review closely; early engagement through innovation programmes will position firms well.
Begin preparations for PS26/2 operational incident reporting (March 2027). Assess third-party dependencies and ensure notification procedures are documented.
Review financial crime controls against the FCA's published expectations. Firms receiving supervisory attention should act proactively before enforcement escalation.
Source | Financial Conduct Authority | Regulatory Priorities, Payments
