Over the last few years, the Financial Conduct Authority (FCA) has shown an increased interest in tackling financial crime. Several thematic reviews have been conducted with a particular emphasis on anti-money laundering (AML) systems and controls.
The AML thematic reviews have quickly been followed by a number of enforcement actions, the largest being a £72 million fine for poor handling of financial crime risks. This was the latest instance of a UK institution failing to take reasonable care to establish and maintain effective AML systems and controls relating to high risk customers, including politically exposed persons.
This fine is the latest in a series of actions into both retail and commercial banking activity and further demonstrates the FCA’s willingness to use the new financial penalty regime. The new regime means that larger fines are likely to be issued by the FCA.
Firms are strongly encouraged to conduct a review of their AML, anti-bribery and corruption policies and procedures. Training programmes are also recommended to ensure all staff adhere to industry best practice. In addition to the enforcement notices, the importance of this activity has been expressed by the FCA on numerous occasions, especially with the publication of ‘Financial Crime: a guide for firms’ in April 2015.
Equiniti Hazell Carr’s Solution
Having worked in the regulatory environment for almost 20 years, Equiniti Hazell Carr understands the legal and regulatory requirements placed on firms in respect of AML. The UK regulator continues to focus resources on firms exposed to financial crime and is clearly prioritising customer protection. Equiniti Hazell Carr can fully support all aspects of this AML activity through supplying skilled resource with the relevant expertise.
The Equiniti Hazell Carr resource pool includes many consultants with substantial knowledge and experience developed over a wide range of projects. These individuals have compliance expertise, including specific knowledge of customer on-boarding, as well as best practice approaches to know your customer (KYC) and AML processes. This resource pool consists of the following:
- Senior AML Consultants – Highly skilled and experienced consultants with excellent industry relationships and reputations.
- AML Administrators – Financial services specialists to handle bulk processing and transactional work.
- Team Leaders – Managers with substantial experience of supervising teams to ensure quality and productivity meets with the client’s expectations.
- Operations Managers – Senior management staff to provide oversight to the project and ensure that all targets and milestones are met.
Hazell Carr's flexible panel of resource has been used to deliver a range of client AML projects, as outlined below.
AML Compliance
- Providing AML support to operational areas to ensure effective implementation of controls and processes.
- Assisting with compliance issues arising out of combating the financing of terrorism obligations.
- Reviewing suspicious transaction monitoring tools to detect irregular transactions.
Client On-Boarding
- Performing enhanced due diligence reviews for high risk customers opening new accounts.
- Reviewing client financial statements and performing various searches.
- Reviewing customer and account information and analysing compiled data to identify high-risk customers.
KYC Compliance
- Approving KYC documentation collected through public record research and other external sources for on-boarding and AML purposes.
- Conducting enquiries on individuals and firms suspected of financial crime by analysing transaction history, commercial databases and other sources to investigate activities related to money laundering, financial crime and terrorist funding.
- Conducting full analysis on all accounts and investigative escalation of cases meriting further review.
- Identifying new and emerging frauds from suspicious customer activity and minimising losses by placing cautions and terminations on suspected accounts.
- Ensuring activities and nature of the business relationship is appropriate and in line with the documents collated.
Given the high level of scrutiny the FCA is placing on this area, it is essential that all organisations ensure their AML policies are applied appropriately and consistently. Equiniti Hazell Carr can provide relevant expertise and resource wherever required.