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Bethany Holdsworth

Fincrime threat and risk management: a case of doing the right thing?

The FCA has recently released a speech, titled 'Doing the right thing'.

It's great to see the good work the FCA are undertaking to hold unwilling firms to account. Whilst highlighting the need for consequences for breaches it's also great to see proportionate and pragmatic action being taken by the FCA, when firms, who recognise their failings and who are swift in implemented measures to address these, and who have engaged with the FCA early.

Reflecting on 'doing the right thing' Ms Chambers highlights "Early detection is always more effective" and that "it is always better to come forward first if you do have any concerns". The FCA are bolstering their toolkit, not only from a technological and data standpoint as we are all aware, but also through recruitment, bringing onboard, Steve Smart from the National Crime Agency where he was the director of intelligence. This is significant as Ms Chambers eludes; "There really is nowhere to hide with him, so I would advise everyone to get their ducks in a row now".

In 2022 approximately $11billion was spent by banks globally on technologies to mitigate money laundering. Despite the spend, it is estimated money laundering could be valued at $2.3 to $2.8 trillion per year. Identifying, Assessing and Understanding your Financial Crime Threats and Risks, and the effectiveness of your Financial Crime Framework is undoubtedly, never more important than the present.

Perhaps Doing the right thing, first entails looking at your Business-wide Financial Crime Risk Assessment?

🚩 How do you identify your threats and risks?

🚩 How do you design your controls? Are they mapped back to the Threats and Risks?

🚩 How do you assess the effectiveness of your control framework? Is it adequate?

🚩 When did you last review your Business Wide Risk Methodology and Process?

🚩 Do you actively engage with the regulator on weaknesses identified in your control framework and communicate your plans to address these?