FCA provides warnings to banks over money laundering failings

The Financial Conduct Authority (FCA) has issued warning letters to retail banks due to ongoing weaknesses and failings around their financial crime controls.

 A letter – penned by FCA director of retail banking and payments supervision David Geale – was issued in May and then made public via the organisation’s website on June 29th.

According to the FCA, the letters outlined the key issues and weaknesses that surround retail banks’ financial crime controls and requested that each company completes a gap analysis of the identified weaknesses and take prompt action to resolve them by September 17 this year.

The letter also detailed that the FCA is likely to request a demonstration of the steps taken after the aforementioned date, and, if deemed not good enough, the FCA may consider regulatory action to manage the financial crime risk faced.

The FCA noted the common weaknesses identified were governance and oversight, risk assessments, transaction monitoring, suspicious activity reporting and due diligence.

The letter also highlighted that, in many cases, consistent failings have led to intervention – requiring firms to appointed a skilled individual to carry out a detailed review, impose business restrictions and in more severe cases – enforcement action.

The FCA recently proposed the introduction of climate-related disclosure rules for the most prominent listed commercial companies in December 2020.

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