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How this Work Relates to Regulatory Expectations on Fintechs
Many of the governance failure mechanisms examined in Governance Analysis relate to issues embedded in modern accountability and operational resilience frameworks. These regimes formalise expectations around responsibility, operational resilience, and third-party dependency and can convert governance weaknesses into supervisory exposure.
Governance Context: Ireland and EU Regulated Fintechs—IAF, SEAR, PCF & DORA
The Mechanics of Failure including Regulatory Framing (IE/EU) (2026)
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Standalone Papers to Regulatory Framing (IE/EU) (2025, revised 2026)
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Governance Context: UK Regulated Fintechs—SM&CR, OpRes & CTP
The Mechanics of Failure including Regulatory Framing (UK) (2026)
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Standalone Papers to Regulatory Framing (UK) (2025, revised 2026)
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These papers provide high-level governance insights and mapping. They are tools for discussion, not regulatory guidance or compliance material. Whilst the regulatory framing is designed with fintech firms in mind, the underlying governance papers address failure patterns that are common across regulated industries and are not sector-specific in their application. For regulatory status and perimeter clarification, see terms of use.
Boards, founders, or senior executives with defined accountability responsibilities who require independent analytical challenge to their governance system may contact engagement@simonsmaul.com to initiate a discussion. Many conversations begin informally, as boards consider whether independent challenge would add value.
The Methodology page provides further details on how engagements typically work.
⛛ Regulatory Alignment—Ireland / EU
Accountability—IAF / SEAR¹ (PCF Roles)
Under the Central Bank’s Individual Accountability Framework (IAF) and Senior Executive Accountability Regime (SEAR) – Pre-Approval Controlled Functions (PCFs) have a statutory Duty of Responsibility to take reasonable steps within their roles.
Assurance vs. Understanding: Exposure arises when a PCF accepts technical assurance without active probing, or relies on comfort narratives that collapse under scrutiny
Normalised Ambiguity: Liability accumulates when repeated “temporary” decisions are never revisited or tested against operational reality
Hindsight Scrutiny: Governance is judged in hindsight, when internal accounts are tested against evidence, timelines, and escalation records
Central Bank of Ireland (CBI) Operational Resilience—What Breaks Under Stress
Failings in Operational Resilience (OpRes) often become IAF/SEAR problems when governance ownership and escalation are unclear.
Blurred Service Ownership: Resilience fails when service ownership is fragmented across product, technology, and third-party partners
The Tolerance Trap: Impact tolerances reflect technical convenience or historical performance rather than rigorous assessment of customer harm or firm viability
Quiet Degradation: Governance degrades under scale, only to be revealed as “paper resilience” during disruption or supervisory challenge
False Assurance: Frameworks can create a static or abstract sense of control
ICT & Third-Party Risk (DORA)—Governance Under Dependency
Operational and third-party resilience under Digital Operational Resilience Act (DORA) under CBI OpRes 2.0, becomes an accountability issue under IAF/SEAR when reasonable steps are scrutinised.
The Technical Silo: Risk concentrates when ICT is treated as a project issue rather than a management-body obligation
Contractual Illusion: Third-party dependence is managed contractually in name, without operational visibility or realistic exit and substitution options
¹ Whilst many fintechs do not currently fall within the scope of the Central Bank of Ireland's Senior Executive Accountability Regime (SEAR), they remain subject to the Individual Accountability Framework (IAF), including the Conduct Standards and the Fitness and Probity Regime, in respect of individuals performing Pre-Approval Controlled Functions (PCFs). It is anticipated that SEAR will be extended to additional sectors over time. In addition to the IAF, fintech firms are subject to the Central Bank of Ireland's Cross-Industry Guidance on Operational Resilience, which frames expectations around service identification, impact tolerances, and scenario testing. Firms operating within the EU regulatory perimeter are also subject to the Digital Operational Resilience Act (DORA), which establishes common standards for ICT risk management and third-party oversight, and has applied since 17 January 2025 under the CBI OpRes 2.0 (CBI Guidance July 2025).
⛛ Regulatory Alignment—UK
Senior Managers & Certification Regime (SM&CR)²—“Reasonable Steps” Exposure
Under SM&CR, Senior Managers have a statutory Duty of Responsibility to take reasonable steps within their prescribed responsibilities.
Assurance vs. Understanding: Exposure arises when technical assurance is accepted without active challenge
Normalised Ambiguity: Liability accumulates when unresolved governance trade-offs become institutionalised
Hindsight Scrutiny: Decisions are assessed against documented evidence, escalation records, and role clarity
Financial Conduct Authority (FCA)/ Prudential Regulation Authority (PRA) Operational Resilience—What Breaks Under Stress
Operational Resilience failings translate into SM&CR exposure where ownership of Important Business Services, mapping, or impact tolerances is unclear.
Blurred Service Ownership: Fragmented accountability across product, technology, and outsourced providers
The Tolerance Trap: Impact tolerances set by operational convenience rather than customer harm or firm viability
Quiet Degradation: “Mapped” resilience that lacks real operational capability
False Assurance: These frameworks can create a static or abstract sense of control
Outsourcing & Third-Party Risk (PRA SS2/21 / UK CTP Regime)—Governance Under Dependency
Third-party and outsourcing expectations become a senior management issue where oversight, substitution planning, and concentration risk are weak.
The Technical Silo: Outsourcing risk treated as procurement or IT governance rather than Board-level responsibility
Contractual Illusion: Reliance on contractual clauses without operational monitoring or exit readiness
² In the UK, key regulatory regimes, including the Senior Managers and Certification Regime (SM&CR), Operational Resilience (OpRes), and Outsourcing requirements, apply to authorised fintech firms to the extent that they fall within the regulatory perimeter. In addition, the Critical Third Parties (CTP) regime applies to designated third-party service providers rather than fintech firms themselves, although fintechs may be indirectly impacted where they rely on such providers. It should be noted that payment institutions and e-money institutions, whilst authorised, are not currently subject to SM&CR, with the FCA's proposed extension to those firms not yet implemented.
Limitations and Scope: This work is intended to support Board-level understanding, senior executive focus, and informed challenge in environments subject to increasing accountability and resilience expectations. No Audit, Assurance, or Regulated Activity: This work constitutes independent governance analysis only and does not involve regulated financial services activity, legal advice, formal regulatory interpretation, audit or assurance services, or operational implementation or executive decision-making responsibilities in any jurisdiction. Independent Analysis: Commentary and papers are based on patterns and mechanisms observed across various environments and do not constitute primary evidence or specific predictions of failure. Information Security: No publication or reproduction of confidential, non-public, or copyrighted material.
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