The Financial Conduct Authority has warned e-money firms operating in the UK that they will need to undertake a "significant shift in culture and behaviour" if they are to comply with new Consumer Duty rules.
The Duty comes into force in five months, requiring banks and other financial institutions to drastically improve their consumer care and protection efforts.
In a 'Dear CEO' letter addressed specifically to Payment Institutions, Electronic Money Institutions and Registered Account Information Service Providers, FCA director of digital assets Matthew Long says meeting the Duty will require a significant shift in culture and behaviour.
"We recognise that the implementation of the Duty comes at a challenging time," he writes. "However, we believe that embedding the Duty effectively will help payments firms continue to build trust amongst consumers in using the expanding range of products and services and enable the sector to continue to grow in a way that delivers consistently good outcomes for customers."
The letter comes just a month after the FCA warned that some firms are falling behind in their preparation for the new regime and are failing to address a shortfall in their technology resources.
In addressing e-money CEOs directly, Long draws attention to a number of shortcomings plaguing the sector, including poor financial crime controls, inadequate customer support channels, misleading promotions, fair value pricing and hidden charges, and an over-reliance on mobile-only authentication.
Long also warns firms about their responsibilities in providing a duty of care to customers who have fallen foul of scammers, including authorised push payment fraudsters.
“Whilst we appreciate that the facts of these can be hard to establish, firms should ensure that their treatment of customers who feel themselves to be victims and are distressed is not unduly harsh or unsupportive,” Long wrote.