Does The Financial Conduct Authority Regulate All The Money Transfer Companies in The UK?

According to the Cyber Security Breaches Survey of 2020, 46% of businesses and 26% of charity institutions in the UK have been victims of cybercrimes in the past 12 months. Among the 46% businesses that suffered cyber-attacks, 68% were small and medium businesses (SMEs), 75% were large businesses, and among the 26% charities, 75% were high-income. 

These statistics show why the financial services sector is among the most guarded and regulated industries worldwide. Modern technology has given a boom to financial services, while the clients’ requirement to send money online instantly has proven to be a catalyst for developing financial money transfer institutions.

Billions of pounds of remittances find their way across the international borders ending up at innumerable destinations. The magnitude of these remittances demand extra care and robust regulations in place, both by the private online money transfer companies that send money to India (or any other countries) and the regulatory authorities.

Financial Conduct Authority (FCA)

In the UK, the Financial Conduct Authority (FCA) is one such institution that regulates the financial services sector. All UK based firms that deal in online money transfer services are bound to be authorised or registered by the FCA. The authorisation by the FCA safeguards an individual’s funds, and if a company gets liquidated, the clients are most likely to get their money back. 

This is why it is imperative to check if the firm that claims to send money online instantly is regulated by the FCA or not.

The firms with limited market presence, i.e. the small firms, can choose to get registered rather than authorised. Online money transfer companies should meet the following conditions to get registered by the FCA:

  • The company should be UK based
  • All the managers employed should have a clear history regarding financial crime 

FCA Regulations

According to the regulations laid out by the FCA:

  • Online money transfer companies have to maintain a minimum capital if their turnover rises above €3 million per month.
  • Online money transfer companies have to follow regulations to curb the illegal practices of money laundering and other financial crimes.
  • These companies have to ensure every amount above $60 and keep it separate from other company funds to be refunded to the client if the company dissolves.

What To Do If Foul Practices Are Suspected

Regulations are in place to curb the illegal practices suspect regarding financial institutions. However, regardless of these regulations in place, private companies might not be following them. 

Suppose a client who wants to send money to India suspects corrupt practices being carried out by an online money transfer company. In that case, he/she can report the institution to the Financial Ombudsman Service (FOS) — an institution that mediates disputes. 

The client can also report his/her suspicions to the FCA or the Office of Fair Trading. The client is compensated for losses if the company is found to violate any regulations or mishandles the remittances.


Vast amounts of hard-earned remittances flow out of the UK every year. These amounts, as they rose, have resulted in the development of online money transfer firms. These firms have grown in number over the years, offering a range of financial services. 

To make sure that your money is in the right hands, make sure that the company is either authorised or registered with the FCA. The first and foremost responsibility to curb financial irregularities rests upon the clients. If they use trusted firms to move their money, it won’t just help the government maintain transparency but also safeguard the concerned client against any fraud or mishap.