Who Owns the Wire Transfer Regulations? Defining Accountability for WTR Compliance

As regulatory scrutiny intensifies, payment service providers (PSPs) and virtual asset service providers (VASPs) must reassess their compliance posture with the wire transfer regulations (WTR), a core component of the global anti-money laundering framework. These obligations, grounded in the FATF Recommendation 16 and transposed into UK law via the Money Laundering Regulations 2017 (as amended), mandate the collection, verification, and secure transmission of originator and beneficiary information for qualifying transfers. Despite the clarity of these legal requirements, there is still considerable uncertainty within institutions about where operational and strategic responsibility for WTR compliance truly lies.

The answer must begin with recognising that Financial Crime Compliance (FCC) holds the primary accountability. However, successful delivery depends on close alignment with Payment Operations and proactive engagement with Business Risk. Without this clarity, institutions risk non-compliance, operational failure, and regulatory sanction.

Understanding the Regulatory Imperative

The wire transfer regulations are not optional. They are a statutory requirement in most jurisdictions and an essential component of any effective financial crime control framework. They require that the names, addresses, and account numbers of originators and beneficiaries accompany electronic fund transfers, whether conducted in fiat or virtual assets. In the case of cryptoasset transfers, the FATF Travel Rule introduces near-identical requirements for VASPs, requiring the secure exchange of personal information between counterparties.

Supervisory authorities such as the Financial Conduct Authority (FCA) expect regulated firms to implement robust systems that ensure this information is collected, verified, and transmitted correctly and consistently. Failure to comply is not only a regulatory breach but can also contribute to the movement of illicit funds, frustrate investigations, and undermine the reputation of the financial system as a whole.

The Central Role of Financial Crime Compliance

FCC is the natural home for WTR oversight. This function is already responsible for managing anti-money laundering (AML) and counter-terrorist financing (CTF) obligations. It is the team that drafts policies, interprets regulations, oversees risk assessments, and liaises with regulators. It is also the team accountable for Suspicious Activity Reporting (SAR), customer due diligence, and transaction monitoring.

By extension, FCC is best placed to lead on WTR implementation. This includes ensuring that processes are designed to meet regulatory expectations, that system specifications are aligned to WTR data requirements, and that breaches are investigated and escalated appropriately. FCC should also coordinate training and awareness activities to ensure relevant staff understand their obligations and the consequences of failure.

Execution Depends on Payment Operations

While FCC leads on compliance design and oversight, Payment Operations executes those requirements in practice. This function processes real-time payments, configures messaging formats in systems such as SWIFT and SEPA, and handles exceptions. These teams deal with practical realities that compliance policies alone cannot address, such as data mismatches, rejections, and time-critical remediation.

In many institutions, WTR failures are rooted not in policy deficiencies but in operational breakdowns. For example, payment platforms may not enforce mandatory fields or may allow character limits to truncate important data. Message formats may vary across counterparties or geographies. Exceptions may be processed without adequate controls or documentation. All of these scenarios are preventable if Payment Operations and FCC work in partnership and share a common understanding of the risks involved.

Business Risk as the Strategic Connector

The Business Risk function adds strategic depth to WTR compliance by embedding regulatory considerations into the first line of defence. These teams typically work across products and geographies, helping to integrate compliance requirements into client lifecycle management, new product approval, and operational change processes.

In the context of the WTR, Business Risk plays a critical role in ensuring that new services or business lines are designed with compliance in mind. This may involve advising on the onboarding of counterparties in high-risk jurisdictions, evaluating the impact of system changes on data capture, or identifying gaps in client information that could impair payment processing. In the fast-evolving world of cryptoassets, Business Risk is particularly important in guiding decisions about how to handle transfers involving VASPs in jurisdictions where the Travel Rule has not yet been implemented.

The Importance of Defined Governance for Wire Transfer Regulation

Effective compliance requires clearly defined governance. Many institutions rely on informal or overlapping responsibilities, which creates confusion and impedes accountability. Instead, senior management should ensure that WTR responsibilities are formally assigned through a documented accountability framework.

FCC must be clearly accountable for regulatory interpretation and policy design. Payment Operations should be responsible for implementing those policies in practice and maintaining the integrity of payment processes. Business Risk should be consulted on risk appetite, control design, and emerging threats. Senior management must be informed and equipped to challenge, support, and resource compliance efforts appropriately.

This governance structure should be codified in procedural documentation, internal control frameworks, and management information reports. Without this clarity, firms expose themselves to regulatory and operational risk.

The Consequences of Inaction

Regulators have taken action against firms that fail to meet WTR obligations. In the banking sector, enforcement cases have highlighted persistent failures to collect or transmit required information. In the cryptoasset sector, enforcement is still emerging, but regulators have made clear that the expectations are equivalent. The FCA’s 2024 update on the Travel Rule reinforced that UK-registered firms are expected to take all reasonable steps to comply, even when their counterparties are located in jurisdictions that have yet to implement reciprocal measures.

Firms that treat WTR compliance as a minor technical issue are missing the wider point. Wire transfer rules exist to support traceability, protect the financial system from abuse, and enable law enforcement to investigate and prosecute criminal actors. A firm that cannot demonstrate robust WTR compliance is, in effect, creating blind spots that can be exploited by those seeking to launder proceeds of crime, finance terrorism, or evade sanctions.

Conclusion: Moving from Uncertainty to Ownership

The question facing PSPs and VASPs is not simply who owns WTR compliance. It is whether ownership has been defined, operationalised, and supported by a governance structure that enables effective implementation. Assigning responsibility without clarity or authority is no better than failing to assign it at all.

Senior management must move decisively to confirm that WTR compliance is a strategic priority, not a marginal obligation. This means empowering FCC to lead, enabling Payment Operations to deliver, and equipping Business Risk to anticipate and mitigate vulnerabilities. The wire transfer regulations are not a back-office detail. They are a frontline defence in the global fight against illicit finance. Every firm must decide whether it is ready to uphold that defence or whether it will continue to let ambiguity undermine its integrity.

Can You Name Your WTR Owner Without Hesitation?

If your organisation is still navigating the grey areas of WTR accountability, now is the time to close the gaps. Our latest white paper, Taking Ownership: Embedding Control, Accountability & Oversight into WTR Frameworks, examines governance models, operational pitfalls, and regulator expectations in depth — with practical strategies for PSPs and VASPs to achieve full compliance.

Download the white paper to equip your teams with the clarity and tools to get it right first time.