The Bank of England has fined financial market infrastructure firm Vocalink Limited GBP 11 million in respect of a compliance failure.
Vocalink has been regulated by the Bank of England since April 2018 as a specified service provider, a type of financial market infrastructure firm that is usually involved in the operation of UK payments systems.
According to the official press release, Vocalink implemented a remediation programme in response and had until the 28th of February 2022 to comply with the overall Direction’s requirements. However, an ineffective risk management framework, combined with multiple challenges and weaknesses in its controls, governance arrangements, and escalation processes, meant that it failed to comply in full with the Direction’s requirements by the given deadline.
More information on Vocalink Limited’s GBP 11 million fine
The Bank’s investigation identified that the root cause of Vocalink’s non-compliance was the overall failure to have in place a sufficiently integrated risk management framework for the remediation programme. This process was expected to ensure that risks facing the programme could be properly understood, monitored, and shared amongst the three lines of defence, as well as external assurance providers. At the same time, it also found there were failures to escalate key risks and information to senior committees, which undermined the firm’s overall capability to fully comply with the Direction. The Bank of England currently considers Vocalink’s governance arrangements to fall below the standards expected of a financial market infrastructure firm.
Furthermore, the company has also invested significantly in the process of remediating the issues, which led to both the Direction being issued and the subsequent compliance failure.
In addition, Vocalink’s cooperation throughout the investigation, including the early admission of a compliance failure, resulted in a 15% reduction in the penalty. The company has agreed to resolve the matter and, therefore qualified for a further 30% reduction in the fine. Without these reductions, the fine imposed by the Bank of England would have been GBP 20 million.
