The UK financial regulator has identified “weaknesses” in the financial crime controls of six competitor banks, including failure to check customers’ income and occupation.
The Financial Conduct Authority (FCA) has not named the retail central banks, but said they were “new to the market” and have more than eight million customers combined.
The financial watchdog revealed the deficiencies during a review last year. Challenging banks – which use technology to compete with traditional high street banks – have been found to need to improve their risk assessment of financial crime.
Other failures included a lack of enhanced due diligence and a lack of adequate risk assessments.
Some challenging banks did not have customer financial crime risk assessments in place, the FCA said.
Monzo is currently a digital bank investigation potential breaches of money laundering and a potential fine to be infringed, but it is unclear whether this applies to the latest review by the FCA. RATN contact Monzo for comments.
“Challenger banks are an important part of the UK retail banking offering,” said Sarah Pritchard, executive director, markets at the FCA. “However, there is no trade-off between quick and easy account opening and strong financial crime controls. Challenger banks should consider the findings of this review and continue to improve their own financial crime system to prevent harm. ”
The FCA said it also found “some evidence of best practice”, citing competitor banks that use technology to identify and verify customers more quickly.
The regulator has hired an additional 80 staff to tackle this problem and said it will close businesses that “do not meet regulatory standards”.
They are not just competing banks that are at odds with the regulator over financial crime control failures. In December, the FCA fined NatWest a £ 265m street bank for default preventing almost £ 400m of money laundering.
The Regulator identifies ‘weaknesses’ in the financial crime controls of competing banks
Source link The Regulator identifies ‘weaknesses’ in the financial crime controls of competing banks