The Bank of England has imposed a £11.9m fine on Vocalink for failing to comply with a directive under the Banking Act 2009, marking the first instance of such a penalty on a financial market infrastructure firm.
Vocalink has been regulated by Bank of England since April 2018 as a specified service provider. The company was required to address certain system and control deficiencies by February 2022 but did not fully meet these obligations, said the UK’s central bank.
Bank of England’s investigation concluded that Vocalink’s non-compliance stemmed from an inadequate risk management framework that failed to integrate risks across the remediation programme effectively.
This shortfall hindered the firm’s ability to evaluate, monitor, and communicate risks efficiently through its governance structures. Moreover, there were notable failures in escalating critical information to senior committees, further compromising compliance, according to Bank of England.
Bank of England Financial Stability Deputy Governor Sarah Breeden said: “Vocalink fell short of its obligation to have adequate risk management and governance arrangements when responding to the Bank’s Direction. Its failure to comply with that Direction in full has resulted in a significant fine.”
Vocalink’s active cooperation during the investigation, including early admission of its compliance failure, led to a reduced penalty, said the central bank.
The company secured a 15% reduction due to this and an additional 30% reduction for resolving the matter promptly, lowering the total fine from an initial £20m.
Vocalink is responsible for designing, building, and operating payment systems infrastructure in the UK and is deemed a crucial component of recognised payment systems by HM Treasury. These systems are vital for the smooth operation of financial markets and economic transactions.
