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The Bank of England has fined Vocalink £11.9m ($16.2m) for serious failings in its risk management and governance arrangements, marking the first such enforcement action against a financial market infrastructure provider in the UK.
Bank of England fines Vocalink £11.9m
Vocalink, owned by Mastercard since its £700m acquisition from a consortium of UK banks in 2016, operates critical payments infrastructure including Bacs, which processes 80% of UK salaries; Faster Payments, which handled £4.2tn of transfers last year; and Link, the national ATM network covering 47,000 cash machines.
Its systems also process the majority of household bills and almost all state benefit payments, positioning it as an effective monopoly within the UK’s real-time payments ecosystem.
The fine relates to Vocalink’s failure to implement adequate risk management frameworks and governance controls by February 2022, following regulatory directions issued by the Bank.
According to the central bank, Vocalink reported that it had addressed the identified weaknesses.
However, an independent expert’s assessment – commissioned after concerns were raised by an external consultant – found the remediation work fell short of compliance requirements.
Sarah Breeden, Deputy Governor for Financial Stability, described the penalty as a response to Vocalink falling “short of its obligation to have adequate risk management and governance arrangements when responding to the Bank’s direction”.
She emphasised that such deficiencies in a firm operating systemic payments infrastructure posed material risks to financial stability.
The BoE’s final notice noted that Vocalink’s fine was reduced by 45% – comprising a 15% reduction for co-operation and early admission of failings, and a further 30% for agreeing to resolve the matter. Without these mitigations, the fine would have totalled £20mn.
Vocalink stated: “We are pleased to resolve this matter which related to issues identified in 2020. Since then, we’ve delivered a number of improvements, as recognised in the Bank’s final notice.”
It stressed that the historic issues “had no impact on the service we delivered to UK consumers and businesses.”
The fine arrives amid ongoing scrutiny of the UK’s payments infrastructure.
Last year, Pay.UK, the body overseeing standards in payments, explored appointing an alternative provider to Vocalink.
Indian IT giant Tata Consultancy Services was at one stage in contention, though the process was paused pending the government’s new payments sector strategy.
This landmark enforcement signals the Bank of England’s growing willingness to apply its regulatory powers to safeguard systemic resilience in the fast-evolving payments sector.
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