The FCA has published a speech given by Megan Butler (Executive Director of Supervision – Investment, Wholesale and Specialists at the FCA). The speech is entitled A more effective approach to combatting financial crime.

Key points in the speech include:

  • the FCA takes a proportionate regulatory approach and wants to encourage innovation. The FCA focuses its efforts on the firms that pose the greatest risk. In particular its approach to anti-money laundering (AML) supervision is risk-based. Fourteen major retail and investment banks from the UK, US and mainland Europe, which account for over 95% of UK retail banking and 75% of UK wholesale banking revenues, are subject to the regulator’s systematic AML programme;
  • one important question for the FCA at the moment is, ‘can technology help make your compliance processes slicker, more efficient and more effective?’ The FCA sees room for innovation in a number of areas with AML arrangements being high on the agenda. In particular the development of distributed ledger technology has the potential to offer innovative solutions to financial crime issues and financial services more widely;
  • banks have a key role in tackling financial crime and the regulator recognises that the industry is becoming increasingly aware of the need to get this right due to the damage this causes to their business and society;
  • on de-risking the FCA is committed to working with HM Treasury and other partners to improve the way banks identify genuine money laundering risks. The FCA sees reducing barriers to information sharing between banks as a particular imperative to reduce duplication of effort as well as focus attention on individuals who pose real risk to the system. The regulator is keen to make progress in this area and is extremely supportive of technological solutions to customer due diligence; and
  • the FCA welcomes close engagement with the British Bankers’ Association and is committed to closer engagement with the Government, enforcement agencies and other regulators.

View A more effective approach to combatting financial crime, 20 September 2016