2025 is shaping up to be the most demanding year yet for payments compliance. With daily reconciliations, fraud metrics and SCA mandates all under scrutiny, even minor lapses can be costly.
To help firms keep pace, this guide breaks down the key regulatory requirements in 2025, along with the practical strategies and technologies needed to simplify compliance and stay audit-ready.
1) Safeguarding
Safeguarding rules require UK-regulated firms to separate customer funds, maintain up-to-date reconciliations and prove they can cover liabilities at any point in time.
Firms must:
- Hold client money in segregated accounts
- Perform daily reconciliation of safeguarded funds
- Maintain a full audit trail of historical safeguarding reports
- Submit to independent safeguarding audits (even though the FCA hasn’t yet set a formal standard)
đź’ˇPro tip: Automate daily reconciliations and store records centrally to make audit prep frictionless.
2) Fraud reporting
Fraud monitoring is a key focus area across the UK, EU and beyond.
Reports often cover:
- Total fraud volumes
- Breakdowns by fraud type, channel and root cause
- Actions taken to mitigate and prevent fraud
Whether you’re submitting REP017 in the UK or EU-wide stats, robust reporting tools and ongoing transaction monitoring are essential to maintaining compliance.
3) PSD2 and SCA
PSD2 (Payment Services Directive) introduced mandatory SCA (Strong Customer Authentication) for most electronic payments.
Firms must:
- Apply two-factor authentication (2FA) for high-risk transactions
- Understand and manage exemptions for low-value or recurring payments
- Maintain audit trails and adapt to changing regulatory interpretations
SCA doesn’t just affect user experience—it’s directly tied to fraud prevention and compliance outcomes.
3 proven strategies to simplify payments compliance
Staying compliant can feel like a moving target as reporting guidelines change. But here are three proven methods to build resilient compliance practices that truly scale:
1) Embed compliance into daily operations
Don’t wait until an audit is looming. By integrating regulatory obligations into your workflows from day one, you’ll:
- Ensure audit trails are always complete
- Reduce manual effort and avoid deadline panic
- Improve data accuracy and accountability
- Maintain reconciliation continuity without manual oversight
đź’ˇExample: One client used Kani to automate daily reconciliations and give auditors time-limited read-only access to their data, passing an unexpected audit in under three weeks.
2) Hire (or borrow) expertise
Whether you recruit internally or work with a trusted partner, access to hands-on compliance knowledge helps you:
- Interpret unclear regulations
- Build scalable reporting infrastructure
- Anticipate future requirements and avoid missteps
No template? No problem. Industry experience helps fill the gaps where guidance is vague but it’s important to partner with fintech-native vendors who understand all the nuances.
3) Automate wherever possible
Modern compliance is far too complex for spreadsheets. Leading businesses use dedicated platforms to:
- Ingest and standardise data from banks, processors, ledgers and card schemes
- Run daily reconciliations automatically
- Flag anomalies and variances early
- Maintain consistent formatting and data integrity
- Store version-controlled reports with sign-off workflows
When compliance is embedded into core processes from the outset, it becomes faster, simpler and more scalable—even as your business needs change.
What modern compliance looks like in practice
The old model—manual data work, rushed reports, complex spreadsheet macros—is no longer viable today. Here’s what best-in-class compliance really looks like in 2025:
🔄 Automated, auditable reconciliation
The right reconciliation software ingests payment data from any source, reconciles in real time and eliminates manual matching. That means:
- Faster investigation of discrepancies
- Consistent formats for faster reporting
- Dashboards for real-time visibility into compliance KPIs
đź”’ Control, integrity and access
Modern compliance platforms go beyond output. They offer:
- Immutable audit logs with timestamped changes
- Role-based access and user permissions
- Automated version control and report sign-off
Everything’s traceable, secure and always ready for inspection (no matter when the audit arrives).
🧠Expertise + software = scalable compliance
Software is just part of the solution. Look for vendors who bring deep domain experience, not just a flashy dashboard. The ability to configure reports, support audits and interpret regulations proactively adds real long-term value.
Final thoughts
Payments compliance isn’t just a box to tick—it’s the foundation of trust, scalability and market access.
Whether you’re navigating safeguarding rules, fighting fraud or adapting to PSD2, the key to success is embedding compliance into your culture, systems and workflows from the very beginning.
Ready to see how Kani can take your payments compliance to the next level?
