Research finds nearly 90% of regulated firms are failing to meet new CASS 15 safeguarding rules despite believing they are already compliant
Nearly nine in ten UK payments firms are failing to meet updated Financial Conduct Authority (FCA) safeguarding requirements (CASS 15), despite widespread belief among compliance teams that they are ready, according to new research.
The study, conducted by Kani Payments, surveyed compliance and finance leaders across FCA-regulated firms. The results found that while 32% of firms believe they are already compliant with the updated CASS 15 requirements, just 13% are performing the daily reconciliations the new rules will demand.
CASS 15 mandates daily reconciliations, annual audits and improved record-keeping to ensure client funds are fully protected. The aim of the regulation is to enhance consumer protection by aligning payment firm requirements closer to strict investment firm standards.
The revised safeguarding regime comes into force on 7 May 2026.
CASS 15: Is confidence outpacing capability?
Awareness of the new requirements is high, with no survey respondents reporting uncertainty about how the CASS 15 rules apply to their firm, and 84% said they could explain their safeguarding calculations to an auditor if required.
Yet the FCA expects firms to produce safeguarding resolution packs within 48 hours of a request, and only 36% report having instant or near-instant access to a complete evidence pack.
Among those relying solely on spreadsheets, two-thirds require at least six hours to compile the necessary documentation, and one in three needs more than a full working day.
Aaron Holmes, CEO of Kani Payments, said: “This is a clear case of confidence outpacing capability. Firms understand the rules, but many are not yet operating in a way that meets them. When only one in eight firms is reconciling daily, but daily reconciliation is about to become the standard, that is not a marginal gap – it is a structural issue.”
Spreadsheets creating structural risk
Despite tightening regulatory expectations, spreadsheets remain central to many firms’ safeguarding processes. Nearly two-thirds (64%) still rely on them for monthly safeguarding returns, and among those firms, 22% lack confidence that their reports would withstand audit scrutiny — a significant admission given that auditors will be assessing compliance from Thursday.
Max Rippon, CASS Audit Manager at accountancy firm HaysMac, tells Payment Expert the new regime’s core demands are well-defined, even if many firms have not yet acted on them.
“The key takeaways from the supplementary regime are the need for stronger safeguarding of clients’ assets, tighter control of shortfalls, enhanced books and records, and regular reconciliations – which have recently been an area of regulatory focus for other CASS chapters,” he says.
Auditors are required to assess compliance across the entire period from day one, meaning gaps at the outset will be visible in findings. “Any significant failures at the outset of the new regime are likely to be reflected in audit findings,” Rippon adds. “The spirit of the new rules is to ensure that clients are well protected in the event of an insolvency, and this should be foremost in every firm’s strategy.”
An operational shift, not a compliance exercise
The updated regime, introduced under PS25/12, requires daily reconciliation, enhanced record-keeping and formalised evidence standards – moving safeguarding from a periodic obligation into a continuous operational control.
For firms whose back-office processes were designed around weekly or monthly cycles, the transition demands structural change to reconciliation logic, data ingestion, exception management and reporting.
Holmes said treating the change as a routine reporting update would leave firms exposed. “Treating this as a reporting upgrade misses the point. This is an operational shift. You cannot simply accelerate a weekly process and expect it to meet daily requirements. Firms need systems and controls that are built for consistency, not manual assembly.”
Rippon adds that firms which have not yet addressed the new rules still have an opportunity to act, but the window is narrow.
“While the changes are looming, they need not be a cause for concern if approached proactively. “
“Firms can use the transition as a positive opportunity to tackle compliance on the front foot and send a strong signal to the market showing their robust governance. The preparation starts with management, who should be setting the tone from the top.”
For those yet to move, Holmes said the margin for delay has gone. “The deadline is here, and the FCA has been clear about its expectations. Firms that have not adapted risk falling behind very quickly.”
