FCA Crackdown on Financial Firms

 

Weak financial crime controls continue to be a problem for the regulated sector, as demonstrated by the significant fines imposed upon three firms in the last year alone. Arian Financial (£289K), Starling Bank (£28m)and CB Payments (£3.5m) were identified and fined by the FCA of having failed to conduct operations with effective and proper due care.

Starling Bank and CB payments both had weak financial controls leading to the implementation of voluntary requirements (VREQ) which prevent ongoing harms to consumers and the market. The VREQs in question related to the onboarding of high-risk clients and the subsequent fines resulted from a failure to adhere to those VREQ requirements.

Arian Financial had inadequate systems and controls in place to identify and mitigate the risk of being used to facilitate fraudulent trading and money laundering in addition to failing to exercise due skill, care and diligence in the application of AML policies and procedures relating to a group of clients.

The frequency of financial crime failings will make ensuring effective and robust controls and procedures are in place a significant focus for the FCA, with the potential for fines likely to increase for those firms who do not take prompt and effective action. With evolving financial crime threats emerging continuously and the complexity used by criminals in their attempts to use the financial sector to commit financial crime increasing, firms should be regularly reviewing their risk assessments, policies, procedures, systems and controls to ensure they remain robust and effective.

 

Objectivus offers assistance to firms in addressing financial crime threats posed through our compliance and internal audit offerings:

Compliance Services – We provide health checks, undertake financial crime risk assessments and conduct policy reviews.

Internal Audit Services – We conduct IA reviews and rigorous testing of financial crime controls, which include validation of s166 and VREQ remediation.

 

Please contact info@objectivus.com or +44 (0)2034 573 283 for further information.