Eternity Law International — News — Risk Management by Small Payment Institutions in Poland

Risk Management by Small Payment Institutions in Poland

Published:
November 21, 2024

In the promptly transforming sphere of monetary facilities, Small Payment Institutions (SPI) play a progressively vital part, notably in Poland. As of January 17, 2025, small payment institutions functioning within the EU will be required to cope with the Digital Operational Resilience Act (DORA), which mandates a simplified ICT risk monitoring scheme. This is part of a broader effort by the EU regulations to amplify the virtual resilience of the monetary segment, focusing on guaranteeing that payment services remain safe  and function in the face of emerging ICT risk.

The key elements of small payment institutions emphasise the need for robust conduction of virtual segment, security, and abnormal case response protocols. The next insight explores how MIPs in Poland will demand to adapt to these evolving regulatory standards, the responsibilities they face, and how they can benefit from the submission routine

Legislative Demands

The introduction of DORA brings new functional obligations for this type of activity, especially in relation to ICT firmness. The legislations introduces significant demands, comprising:

  • Introduction and maintenance of a documented threat conduction  framework: This framework must outline how MIPs will manage ICT risks, detailing mechanisms to swiftly and effectively manage risks, including securing relevant physical components and facilities.
  • Continuous monitoring of ICT methodics: MIPs must constantly evaluate the security and performance of all ICT systems to identify weaknesses or vulnerabilities that may be exploited by cyber threats.
  • Minimising ICT risk impact: The use of updated and resilient ICT systems, protocols, and tools is critical in guaranteeing that MIPs can reduce the impact of potential ICT threats.
  • Quick determination and response to ICT incidents: Rapid detection and response mechanisms should be in place to identify and address sources of ICT risk or irregularities in network systems.
  • Commercial persistence and recovery plans: MIPs are required to ensure continuity of their critical functions through well-documented response and recovery measures. Regular testing and post-incident analysis should be conducted to improve these plans.

Responsibilities of Governing Bodies

Under the simplified ICTthreat control scheme laid out by DORA and the related RTS, MIP governing bodies have several important responsibilities:

  • Alignment with business strategy and risk appetite: The governing bodies must guarantee that the ICT threat control scheme aligns with the organisation’s overall commercial strategy and risk appetite, factoring in ICT risks.
  • Defining roles and responsibilities: It is crucial for SPI to establish clear roles for all individuals involved in ICT-related tasks, including those responsible for maintaining ICT security and managing risks.
  • Budget allocation for resilience: MIPs must allocate sufficient budgetary resources to meet the needs of functional v virtual firmness, comprising ICT shielding awareness programs and staff training.
  • Regular review and updates: The budget should be reviewed annually to guarantee that adequate resources are available for maintaining obedience and supporting resilience programs.

Licensing and Submission Routine

To operate as a small payment institution in Poland, financial entities must navigate a submission routine with the PFSA. This type of certification routine is designed to guarantee that SPI meet the indispensable anti-money laundering (AML) compliance demands, as well as other legislative demands imposed by the local and regional authorities.

One of the advantages of becoming a licensed SPI is the ability to provide remittance processors  within this region and across the EU, subject to transaction limits. A small payment institution licence may also present an alluring opportunity for those looking to join the financial solution space without having to go through the registration process themselves.

Threat Conduction Measures for SPI

Effective threat control  is critical to guarantee profit-oriented continuity and resilience. A comprehensive risk management framework should include:

  1. Regular ICT Risk Assessments: MIPs must conduct thorough assessments of their ICT facilities to determine potential threats and vulnerabilities. This will enable the determination of weak points before they can be exploited by cybercriminals or external threats.
  2. Incident Response Protocols: SPI  need to have clear, documented procedures in place to respond to ICT incidents. These protocols should facilitate a rapid response to minimise damage and ensure that essential facilities continue.
  3. Third-Party Risk Control: Many MIPs rely on external ICT service providers to manage critical aspects of their operations. It is essential to identify and manage any critical dependencies on these third parties, ensuring that service level agreements (SLAs) include provisions for ICT risk management and incident response.
  4. Employee Training Programs: Ensuring that employees are aware of ICT risks and equipped to handle them is crucial. ICT security awareness programs and operational digital resilience training should be provided regularly to all staff members, from management to operational teams.
  5. Business Continuity Plans (BCPs): In the event of a major incident, MIPs must have benefit contingency plans in place to ensure that essential services can continue. This encompasses strategies for data recovery, disaster recovery, and maintaining customer service continuity.

Benefits of SPI Licensing in Poland

Obtaining a SPI offers several licensing benefits to monetary entities:

  • Availability to EU Trade: MIPs licensed in this region can offer transaction processors  not just within the domestic market but across the EU, providing greater market opportunities.
  • Legislative lucidity: Being licensed ensures that institutions are in obedience with PFSA legislations, avoiding potential penalties for non-obedience.
  • Consumer Confidence: A licensed SPI demonstrates a commitment to regulatory compliance, which enhances consumer trust and helps in attracting clients.
  • Operational Gains: With the loyal approach of the SPI licensing, organisations can streamline their entry into the monetary facilities trade while guaranteeing that they fit all necessary lawful and legislative demands.

Conclusion

In conclusion, SPI will need to embrace a comprehensive ICT risk management methodics to comply with the demands of DORA and the RTS. By focusing on resilient digital infrastructure, robust risk assessment frameworks, and continuous training, MIPs can ensure they meet legislation procedures and maintain operational framework resilience. Additionally, for entities looking to enter the trade, securing a  SPI can be an attractive and efficient route to accessing the transaction facilities sector.

By adhering to these frameworks, this type of certification can guarantee the security and reliability of their transaction processors,  gaining the confidence of consumers and regulators alike, and positioning themselves for long-term success in the digital financial ecosystem.

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