Introduction
When a newly established Swedish company faced the task of applying for permission as a payment institution, a complete and business-specific application was required to the Financial Supervisory Authority. The challenge was to build the business and implement a complex regulatory framework from scratch in a short period of time, with strict deadlines.
To establish a robust foundation for the planned operations and meet the expectations of the regulatory authorities, NFC was engaged to support the application process. NFC contributed with a combination of regulatory advisory services and deep specialist expertise in risk management, capital adequacy, and internal governance and control.
NFC's Contribution in Brief
Background
The market for payment services is strictly regulated, among other things by PSD 2. This means that start-up companies are scrutinized based on extensive requirements for internal governance and control already during the establishment and licensing phases. At the time, the company lacked the internal resources and specific expertise required to interpret and implement applicable regulations. Regulations.
In order to not only secure approval from the Financial Supervisory Authority, but also create the conditions for stable operations after the permit was granted, a partner was needed who could translate the regulatory requirements into practical, business-oriented processes.
Critical challenges in the mission:
- Regulatory complexity: Interpret the regulations and translate the requirements for internal governance and control into practical processes adapted to the company's planned business model.
- Double task: Building an operational business from scratch while a comprehensive risk framework was documented in advance of the application process.
- CompletenessEnsuring that all documents were designed in line with the Financial Supervisory Authority’s practices and expectations.
Execution
NFC worked in close collaboration with the company’s management throughout the entire process, based on the business plan and the planned business model. The work was driven in an iterative manner, with initial draft versions of management documents, analyses, and financial supporting documents being progressively refined through ongoing dialogue and feedback.
A central part of the assignment was to prepare the necessary documents within the framework of the permit application process. This included, among other things, financial forecasts for the first three years of operations, forecasts of capital base and capital requirements, and an instruction for risk management in accordance with applicable regulations. The work also included the development of risk assessment and threat assessment analysis, as well as continuity planning, with the focus being on identifying and managing the risks associated with the planned operations.
In parallel, it was ensured that risk management and internal governance were integrated into the company’s operational processes. This meant that the framework was designed not only to meet formal requirements for the application process, but also as a practically applicable and scalable foundation for operations following a granted license.
Outcome
The collaboration resulted in a complete and well-documented application, and an established framework for the company's continued risk management:
Are you facing a similar application for a new or extended permit, or do you want to strengthen your work on risk management and internal control? Read more about our licence application services or contact us for a dialogue about how we can support you from application to approved operations.
