{"id":33386,"date":"2025-07-09T15:00:02","date_gmt":"2025-07-09T15:00:02","guid":{"rendered":"https:\/\/financialrush.com\/?p=33386"},"modified":"2025-07-09T15:00:02","modified_gmt":"2025-07-09T15:00:02","slug":"bank-of-england-fines-mastercards-vocalink-11-9mn-for-risk-management-failings","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=33386","title":{"rendered":"Bank of England fines Mastercard\u2019s Vocalink \u00a311.9mn for risk management failings"},"content":{"rendered":"<p> \n<\/p>\n<div>\n<p>Stay informed with free updates<\/p>\n<p class=\"article__content-sign-up-topic-description o3-type-body-base\"><span>Simply sign up to the <!-- -->Financial services<!-- --> myFT Digest &#8212; delivered directly to your inbox.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=22953f3f-62fd-476d-a747-205485251b66&amp;concept-id=a829e170-bd47-44e2-b504-bafcd70f1d38\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>The Bank of England has imposed an \u00a311.9mn fine on Vocalink, an offshoot of <a href=\"https:\/\/www.ft.com\/stream\/97fa60a8-abaa-4e3f-a00d-2361eefee24c\" data-trackable=\"link\">Mastercard<\/a> that operates a key part of UK payments infrastructure, over its \u201cineffective risk management framework\u201d and weaknesses in internal controls and governance.<\/p>\n<p>The BoE said on Wednesday that the fine reflected Vocalink\u2019s failure to comply with the central bank\u2019s requirement for it to fix a number of weaknesses in its systems and controls identified by supervisors by February 2022.<\/p>\n<p>The penalty is a stinging rebuke for Vocalink, which operates a crucial part of UK financial infrastructure and was bought by Mastercard for \u00a3700mn from a group of 18 UK lenders in 2016.<\/p>\n<p>Its systems underpin the Bacs direct debit system that pays 80 per cent of British wages, the UK Faster Payments system that handled \u00a34.2tn of transfers last year and the UK ATM Link platform covering 47,000 cash machines.<\/p>\n<p>\u201cVocalink fell short of its obligation to have adequate risk management and governance arrangements when responding to the Bank\u2019s direction,\u201d said Sarah Breeden, deputy governor for financial stability. \u201cIts failure to comply with that direction in full has resulted in a significant fine.\u201d \u00a0<\/p>\n<p>The fine represents the first of its kind levied by the BoE on a financial market infrastructure provider. <\/p>\n<p>The BoE told Vocalink to hire an \u201cexpert person\u201d to check it had fixed risk management weaknesses after the company told the central bank it had done so \u2014 despite a consultant working on the process telling executives it had fallen short. <\/p>\n<p>The expert\u2019s report criticised Vocalink\u2019s work to address the BoE\u2019s direction and found it had failed to comply with the requirements.<\/p>\n<p>The central bank said Vocalink\u2019s subsequent co-operation and its early admission of its compliance failures reduced its fine by 15 per cent. It also qualified for a 30 per cent reduction by agreeing to resolve the matter. Without this mitigation, the fine would have been \u00a320mn.<\/p>\n<p>The BoE said Vocalink had \u201cinvested significantly in remediating the issues\u201d that led to the initial risk management problems and the subsequent failure to fix them.<\/p>\n<p>Vocalink said: \u201cWe are pleased to resolve this matter which related to issues identified in 2020. Since then, we\u2019ve delivered a number of improvements, as recognised in the Bank\u2019s final notice. The historic issues related to internal systems and controls and had no impact on the service we delivered to UK consumers and businesses.\u201d<\/p>\n<p>As the sole operator of the UK\u2019s real-time payment system, Vocalink in effect has a monopoly. In addition to the majority of salaries, its infrastructure is also responsible for processing 70 per cent of household bills and almost all state benefit payments.<\/p>\n<p>Vocalink was formed in 2007 from the merger of Bacs and Link. Last year Pay.UK, the government-backed body that sets the standards for the UK\u2019s payments system, ran a process to find an alternative operator. Tata Consultancy Services, the Indian IT giant, was at one stage in the running to replace Vocalink.<strong\/><\/p>\n<p>However, the appointment of a new operator was placed on hold while the government published its new strategy for the sector.<strong\/><\/p>\n<\/div>\n\n<br \/><a href=\"https:\/\/www.ft.com\/content\/22953f3f-62fd-476d-a747-205485251b66\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Stay informed with free updates Simply sign up to the Financial services myFT Digest &#8212; delivered directly to&hellip;\n","protected":false},"author":5,"featured_media":33387,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"class_list":["post-33386","post","type-post","status-publish","format-standard","has-post-thumbnail","category-us","cs-entry","cs-video-wrap"],"_links":{"self":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/33386","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=33386"}],"version-history":[{"count":0,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/33386\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/media\/33387"}],"wp:attachment":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=33386"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=33386"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=33386"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}