Niall Hearty of financial crime specialists Rahman Ravelli emphasises the importance of having the right measures in place.
Retail banks have been warned by the UK's financial regulator about ongoing weaknesses and failings in their financial crime controls.
The Financial Conduct Authority's (FCA's) Director of Retail Banking and Payments Supervision, David Geale, has written to banking chiefs outlining the shortcomings in retail banks' financial crime controls. He has asked each bank to identify and resolve their failings by September 17, 2021.
After this date, the letter warns, the FCA will probably expect the banks to demonstrate what changes have been introduced. Regulatory action may be brought against any bank whose changes are considered to be inadequate.
The areas of governance and oversight, risk assessments, due diligence, transaction monitoring and suspicious activity reporting (SARS) were cited as areas of weakness. According to the FCA, there has been a number of cases where continued failings have resulted in intervention. Some firms have had to appoint a person with expertise to carry out a detailed review, while others have had business restrictions imposed or enforcement action brought against them.
It is of paramount importance that financial institutions ensure that they deploy effective anti-money laundering policies and remain compliant with the regulations. Ensuring effective policies and procedures are in place and the intelligent use of technology will undoubtedly help protect such organisations against the risk of financial crime and instil confidence in their operations.
With the FCA deadline looming and the Law Commission due to publish its report in December 2021 into whether the law relating to corporate criminal liability can be improved, the importance of anti-money laundering measures cannot be over-emphasised.
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