Take financial crime seriously or get a visit from us, warns FCA
Financial services firms have been warned to take tough action on tackling financial crime was made by the regulator.
In a speech at the Financial Crime Summit, director of markets and international at the FCA, Sarah Pritchard, detailed a list of serious crimes which should have raised suspicious activity reports by banks.
“Financial crime is never a victimless crime. It not only costs corporations and consumers, but it also damages the integrity and reputation of our markets, and this undermines our international competitiveness,” said Pritchard.
Pritchard told delegates at the conference that firms who are carrying out “tick box” compliance exercises should not be surprised to find a visit from the FCA.
She said: “Never be afraid to question if your firm has the right risk calibration – checking if it is proportionate – whether it is too high or too low.
Pritchard went on to state the crimes not only cost corporations but also have damaging impacts on consumers.
The regulator said while there has been an 8% reduction in financial crime there is still more to be done.
Pritchard said: “It is firms who are our first line of defence in the fight against crime. They need to understand their risks and calibrate their controls appropriately and proportionately. Those checks carried out by firms can disrupt serious criminality and protect the public.
“Taking early action can also save millions in fines down the line as well as the reputations of firms.”
She went on to say that fraud accounts for 40% of all crime and can have sinister roots in human trafficking, terrorism, and child exploitation.
Responding to the speech, Dr Henry Balani, global head of industry and regulatory affairs at Encompass Corporation, said: “It’s encouraging to see the FCA continuing to ramp up its rhetoric around financial crime complacency. Still, too many organisations are risking potentially far-reaching consequences, from reputational damage to fines, by failing to identify, report and properly act when it comes to illicit activity.
“Key to improving the status quo is prioritising technology driven Know Your Customer (KYC) processes. Leveraging dynamic KYC process automation, for example, can dramatically increase the effectiveness and efficiency of these processes, while helping to identify risk faster.
“Harnessing the best in technology solutions, alongside continued regulatory focus, is a must in the global fight against financial crime,” he concluded.
