Why Fintech PSPs Need a Chief Risk Officer for RPAA Compliance

The September 8 RPAA Compliance Deadline Is Approaching

This shift brings PSPs under a supervisory regime that was once limited to banks. Missing the RPAA compliance deadline can result in fines, loss of registration, or even suspension of operations. For fintech PSPs, the role of a Chief Risk Officer (CRO) is emerging as not just helpful but essential to meet these obligations.

For a detailed overview of the RPAA, see AML Incubator’s RPAA Registration Services and the Bank of Canada’s official RPAA guidance.

What Is a Chief Risk Officer?

A Chief Risk Officer (CRO) is the senior executive responsible for overseeing a company’s risk management strategy. Traditionally, CROs assess operational, financial, technological, and compliance risks. Their primary role is to ensure that the organization’s activities remain within acceptable risk limits and aligned with regulations.

According to the Corporate Governance Institute, CROs manage challenges related to regulation, digital transformation, IT security, fraud prevention, and business continuity. Within fintech PSPs, these responsibilities now directly overlap with RPAA obligations.

Why CROs Are Critical Under the RPAA

RPAA Requirements That Align With CRO Responsibilities

The RPAA requires PSPs to maintain a Risk Management and Incident Response Framework as well as a Safeguarding of Funds Framework. These obligations include:

• Protecting customer funds and sensitive data

• Ensuring daily fund reconciliations

• Implementing business continuity and disaster recovery plans

• Overseeing cybersecurity and fraud prevention measures

• Managing third-party and vendor risk

• Reporting incidents quickly to the Bank of Canada

Each of these aligns with a CRO’s core responsibilities. The Bank of Canada has emphasized that a senior officer must be accountable for these frameworks. In many cases, this means designating a Chief Risk Officer.

See Renno & Co’s RPAA analysis for additional context on how these frameworks must operate in practice.

Continuous Compliance Beyond the Deadline

RPAA compliance is not a one-time exercise. PSPs must provide annual reports to the Bank of Canada, starting March 31, 2026, and must promptly report significant incidents or changes. Regulators expect “living” frameworks that are continuously updated.

A CRO ensures this continuity by:

• Updating risk management policies and procedures

• Conducting quarterly risk reviews

• Overseeing reconciliation and safeguarding of funds

• Supervising incident response and customer communication protocols

Without a CRO, these responsibilities can become fragmented, creating gaps regulators will identify during examinations.

Structuring the CRO Function for Different PSP Sizes

Large PSPs and Established Fintechs

Larger PSPs with significant transaction volumes are likely to appoint a full-time Chief Risk Officer with a supporting risk team. This ensures strong governance, documented oversight, and direct accountability to the board.

Startups and Small PSPs

Smaller PSPs may not have the budget for a dedicated executive. In these cases, fractional or outsourced CRO services are increasingly common. AML Incubator provides outsourced compliance leadership, including CAMLO/MLRO Services, which can extend to risk oversight.

The Bank of Canada confirms that the senior officer responsible for risk management does not need to be an employee, as long as they report directly to the CEO or board. This flexibility allows startups to appoint an external CRO or assign an existing executive to double as CRO until growth supports a full-time role.

Benefits Beyond RPAA Compliance

While the CRO role is mandated for compliance, it also brings significant business advantages:

• Improved credibility with banks and partners: A strong risk management framework reduces the chance of being flagged as high risk by banking partners. See AML Incubator’s blog on Canadian banking access.

• Customer trust: Being RPAA-registered with a dedicated risk leader reassures customers their funds and data are safe.

• Operational resilience: A CRO-driven risk culture helps prevent costly incidents and improves incident recovery times.

• Global scalability: A CRO-led framework creates a foundation for compliance in other jurisdictions, such as MiCA in Europe or AUSTRAC in Australia.

At the End of the Day

The September 8 RPAA compliance deadline is a defining moment for Canada’s fintech sector. Payment service providers must show the Bank of Canada that they have robust, continuously updated frameworks for risk management and safeguarding customer funds.

Appointing a Chief Risk Officer is the most effective way to meet these obligations. For large PSPs, this means hiring a full-time CRO. For smaller fintechs, outsourcing or fractional CRO solutions can provide the same accountability in a cost-efficient way.

By aligning risk oversight with strategy, PSPs not only ensure RPAA compliance but also strengthen their long-term competitiveness.

To prepare your fintech for the RPAA, explore AML Incubator’s RPAA Registration Services, Effectiveness Review, and Regulatory Remediation offerings.

Your Trusted Partner in Regulatory Excellence.