Posted: 4th November 2014

Research published by the British Bankers Association (BBA) reveals consumers of the UK’s largest retail banks completed more than 18 million mobile transactions per week in 2013; twice as many as in the previous year.

The move to mobile payments represents a shift in the wider dynamic of the banking sector. The industry is evolving, allowing banks to offer convenient, more accessible ways of banking; yet, with innovation, arrives the inevitable need for regulation.

TR14/15 – Aims and findings


TR14/15, or the more catchy ‘Mobile banking and payments’ thematic review was published in September. The purpose? For the FCA to determine how firms are achieving good outcomes for consumers when delivering mobile banking products, and to maintain its forward-looking approach by taking a relatively early view on developments.

The Regulator identified a number of areas for firms to deliberate and review, to help ensure that ‘the customer’ is at the forefront of how your firm operates. Namely:

  • How easy it is for consumers to understand their legal rights and obligations when using mobile banking products and services, and what firms are doing to aid consumer education.
  • How firms ensure that the knowledge and understanding of key decision makers in the business is in line with the pace of innovation.
  • How firms ensure consumers’ sensitive personal data and funds are secure, and technology is sufficiently robust to cope with changes in consumer behaviour when making payments.
  • How firms providing mobile banking products and services retain oversight of third parties and outsourced functions involved in the delivery of their product offering to consumers.
  • How new entrants to the mobile payments arena ensure they have adequate knowledge and understanding of the regulatory framework surrounding payments.


Consumers’ understanding of their rights and responsibilities:

There is no evidence to suggest consumers are currently losing money through payments made via mobiles
Firms have built safeguards into their products to mitigate the risk of consumer error as a result of smaller screen and keypad sizes

Senior management:

Firms have focused extensively on consumer satisfaction
It is important to have a strong governance and control framework in place so that appropriate information about the mobile banking channel is escalated up to senior management in a timely manner

Security and technology resilience:

All firms reviewed encrypted data to safeguard its security

Third party oversight:

Firms had appropriate oversight over the key parties involved in their delivery by performing thorough due diligence before contracting with third parties, which were then monitored on an ongoing basis

New payment firms:

The FCA is seeking to address the challenges new innovative firms face when trying to enter into regulated financial services

Over to you…

The Regulator is encouraging firms to consider the areas identified in the report, how they apply them to their business and how they can ensure their mobile banking products and services are working well for consumers. It will now be working with the industry to ensure firms have a comprehensive understanding of these key areas.

What can your firm do to be proactive following this thematic? Have you adapted your control framework to incorporate mobile monitoring?

Consider whether the move to mobile has had resource implications, such as within the financial crime area. Incorporate the customer angle by assessing how you as a firm monitor outcomes and review customer usage of new mobile technology. You can then compare the results against pre-launch expectations.

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