The Financial Conduct Authority (FCA) has written to the UK’s major retail banks to warn them that they must do more to prevent money laundering or face serious consequences.
A letter, concerning persistent shortfalls in banks’ anti-money-laundering (AML) and counter-terrorist financing practices, was sent to bank CEOs in May by David Geale, the FCA’s Director of Retail Banking and Payments Supervision, but was only published this month on the organisation’s website.
Geale warned executives that they could be held personally liable for failing to counter financial crime. Failings in suspicious activity reports (SARs), risk assessments, governance, oversight, and transaction monitoring were all called out by the FCA.
Banks have been asked to complete a gap analysis of these and other weaknesses by 17 September, after which the FCA may take regulatory action based on the findings.
AML initiatives have been in the news several times this month. For example, the European Commission has expressed its desire to set up a new Anti-Money Laundering Authority (AMLA) by 2024, to tackle what it sees as endemic corruption in the financial sector and patchy enforcement of AML directives by member states.
According to the FT, the authority will be able to step in and directly manage cross-border companies by 2026, and levy fines of up to 10 percent of turnover.
As previously reported, Bitcoin and other cryptocurrencies have also been linked to financial crime, money laundering, and terrorist financing by financial regulators.
Earlier this month, the Metropolitan Police ‘confiscated’ $250 million (£180 million) of cryptocurrency as part of an investigation into money laundering, in what was the second significant seizure by force’s Economic Crime Command in recent weeks, following a $160 million (£114 million) haul towards the end of June.
Meanwhile, Dominic Thorncroft, an AML expert and former Chair of the Association of UK Payment Institutions, has been found guilty of laundering the proceeds of an investment scam worth £850,000.
So, it is no surprise that the market for AML technologies has been rising during the pandemic, hitting global revenues of $2.4 billion revenue last year, with significant growth forecast over the next decade, according to a new report from P&S Intelligence.