Insights on regulatory authority and guardrails; instant payments and controls; and disputes, complaints and claims
Expanded use of digital payments and crypto and digital assets in combination with broader acceptance of faster payments networks increase the need for defined regulatory authority around key risk areas—all companies in the digital ecosystem must ensure effective controls to mitigate these risks.
Explore here insights on Payments and Crypto from the KPMG report Ten key regulatory challenges of 2023.
Agencies will continue to warn on the risks and look to establish more codified authority and guardrails within the payments and digital asset space. Topics will range from payment stablecoins and central bank digital currencies (CBDCs) to regulatory authorities and frameworks and financial stability risks.
Congress will likely be asked to consider legislation in several areas around digital assets based on agency recommendations, including legislation that would:
Congressional and agency inquiries and investigations will also increase in the payment space, as innovation continues and more non-traditional and retail players enter the market.
Regulators will use existing regulatory and supervisory authorities to address current and emerging risks related to digital assets, and regardless of whether additional authority is granted by Congressional action:
Given the expanded regulatory attention to real-time payments and to the use of digital assets, regulators will be particularly focused on:
Similarly, regulators have indicated a sharpening focus on payments-related areas, such as:
FedNow Service. The FedNow Service, the FRB’s real-time payment system, is expected to launch in mid-2023, and will be accessible to financial institutions of any size that are members of Federal Reserve System. It will serve as an alternative to the existing private-sector real-time payments system (i.e., The Clearing House RTP (Real-Time Payments) network) and is intended to address concerns about economic security should the single service become unavailable.
The Department of the Treasury has recommended that the U.S. government consider the following actions with regard to instant payments:
Regulators, state AGs and Congressional members are paying close attention to how companies’ handle consumer and investor disputes, complaints, and claims related to payments.
Key areas of ongoing regulatory interest include:
Regulators and enforcement agencies will utilize disputes, complaints and claims data to help guide examinations and investigations, as well as support enforcement allegations. Financial institutions will be expected to have robust programs in these areas that both mitigate fraud risks and are demonstrably favorable to consumer protections.
The ever-evolving risk and regulatory landscape means that companies must constantly remain well-informed, nimble and measured. They must look to address these new and emerging risks within appropriate risk appetites and via a robust control environment. They also must ensure clear and consistent reporting to a myriad of stakeholders and across a varying (and growing) set of risks.
Chief Risk Officer, S&P Global
Ten Key Regulatory Challenges of 2023
Read our report for client perspectives, regulatory recaps, and actionable steps to help mitigate risk.Read more