The UK’s retail banks have been issued a warning by the Financial Conduct Authority about weaknesses surrounding their financial crime controls.
Among the areas of concern are governance and oversight, risk assessments, due diligence, transaction monitoring, and suspicious activity reporting.
The regulator tells banks to complete a “gap analysis” by September against the common weaknesses identified and then take “prompt and reasonable” steps to close these.
The FCA is likely to ask firms to demonstrate the steps they have taken and will consider regulatory intervention if it decides the action is inadequate.
Wayne Johnson, CEO, Encompass Corporation, says: “Retail banking is a high-risk sector for illicit financial crime activity, particularly in today’s climate, where the increase in both online banking and remote working has made money laundering even harder to detect.
“The banks, therefore, must work proactively and collaboratively with the FCA and other regulatory bodies to ensure they are onboarding customers, reporting information and complying accurately with current existing regulations and industry recommendations.”