Making the Direct Agency model With this model consequently looking set to work for the short term – a question become increasingly popular this year, regulators of liability (FCA and PRA) should look to address compliance responsibility within this model. As PSPs are The simplest way to move forward with this model, regulated entities themselves, with their own without falling foul of Direct Members’ restrictive requirements for AML and compliance, the compliance procedures, is to work with a non- liability for the payment should reside with the high street bank settlement partner. Unlike high PSP executing the payment, not the bank settling street banks, who reluctantly offer this service the transaction. This change to current regulation (the regulatory risk and fines can in no way be would go a long way to give FinTech players what compensated by the commercial models that are they really want – control – in a timeframe that currently in place), emerging challenger banks would not be protracted by any review by the BoE. and smaller private banks would benefit from the new business and opportunities of this model. Their risk-based approach to AML and compliance procedures would also provide PSPs with greater flexibility over who they serve. Independent UK bank Raphaels has recently confirmed its intention to become a Direct Member of Faster Payments and initiate this hybrid model, with a number of new financial services providers expected to follow suit this year. This change to current regulation would go a long way to give FinTech players what they really want – control 12 | Payment infrastructure: a call for fair and equal access for FinTech