This briefing, prepared for the London office at Holborn Gate, 330 High Holborn, London, WC1V 7QH, summarises the dominant payments trends observed in 2023, the regulatory focus in England and Wales, and practical steps for corporates and financial institutions engaged in domestic and cross‑border activity.

Key payments trends

2023 saw a continuation and acceleration of several structural trends in payments. Real‑time and instant payment rails expanded, driven by customer demand for immediacy and by greater adoption of ISO 20022 messaging standards. Open banking initiatives and embedded finance models increased competition and choice across payment initiation and account services. At the same time, corporates faced increased costs and frictions in cross‑border flows driven by correspondent banking retrenchment, sanctions compliance, and a tightening of anti‑money laundering (AML) controls.

Regulatory and compliance developments

Regulators in England and Wales have sharpened attention on financial crime controls, payment service governance and operational resilience. The Financial Conduct Authority (FCA) continues to supervise payment services firms under the Payment Services Regulations and related regimes. Her Majesty’s Treasury and the Bank of England have emphasised resilience of critical payment infrastructure and the integrity of cross‑border channels. Key thematic priorities for 2023 included sanctions screening performance, transaction monitoring quality, and governance of outsourced payments technology.

Cross‑border frictions and mitigation strategies

Cross‑border payments remain the area of greatest practical complexity. Correspondent banking relationships have become more selective, and compliance teams face high false positive volumes from sanctions and AML screening. Practical mitigation strategies include:

• Proactive due diligence on payment corridors and correspondent banks, with periodic reassessment of risk appetite.
• Adopting richer data standards (ISO 20022) to reduce screening uncertainty and support automated decisioning.
• Segmenting payment flows by risk profile and applying targeted enhanced due diligence rather than broad-based controls that create unnecessary friction.
• Strengthening intra‑group payment arrangements to reduce reliance on third‑party correspondent corridors where feasible.
• Maintaining clear governance and change‑management processes when migrating to new payment rails or providers.

Practical checklist for corporates and financial institutions

1. Review payment flows and identify high‑risk corridors; map correspondent relationships and service dependencies.
2. Assess readiness for ISO 20022 messaging and plan phased adoption to maximise data quality benefits.
3. Test sanctions and AML screening regimes against representative live scenarios to measure false positives and detection gaps.
4. Document recovery and continuity plans for critical payment journeys and confirm contractual SLAs with vendors and banks.
5. Engage with regulators and industry bodies where proposed legislative or market infrastructure changes may affect business models.

Jurisdiction and sources

Where the regulatory and oversight references in this note are relevant to England and Wales, consult the following official sources for primary material and current guidance:

• Bank of England
• HM Treasury
• Financial Conduct Authority
• legislation.gov.uk
• Office of Financial Sanctions Implementation (OFSI)

General information only; not legal advice and not a substitute for advice on a particular matter.