Ashley Hart

The FCA fined Metro Bank more than £16M for AML/CFT failure. Reason is that the bank dit not have adequate TM tool in place to monitor the transaction of its client. 60m transactions for a total value of £51B were assessed in breach. A topic raising attention of all AML-CFT authorities worlwide, which must raise attention of all obliged entities when setting TM system. Questions to be raised: are all operations and clients covered? Are all scenarios adequetly implemented? are the thresholds in place are aligned with the risk based approach considered in the risk classification and the client scoring model ? What is the SAR conversion rate for each scenario ? Is an annual review and back testing performed to ensure scenarios are relevant ? In the present case, the FCA noted « Metro automated the monitoring of customer transactions for potential financial crime in June 2016. However, its system did not work as intended. An error in how data was fed into the system meant transactions taking place on the same day an account was opened, and any further transactions until the account record was updated, were not monitored. » Also the FCA noted that an employee raised in 2016 concerns on the efficiency and noted a potential breach on the TM tool, but it took four and a half years to fully fix the transaction monitoring issue. #monelaundering #AML

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𝐀 𝐋𝐞𝐬𝐬𝐨𝐧 𝐢𝐧 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐨𝐫𝐲 𝐂𝐨𝐦𝐦𝐢𝐭𝐦𝐞𝐧𝐭𝐬 Recently, Starling Bank was fined £29 million by the UK's Financial Conduct Authority (FCA) for failing to comply with previously agreed-upon requirements. The FCA found that Starling did not properly adhere to financial crime prevention measures, including screening for financial sanctions and managing high-risk customers. While designing a robust risk environment is a critical objective for every compliance department, this case clearly highlights that fulfilling commitments made to regulators is of utmost importance. Starling's fine emphasizes that 𝐚 𝐜𝐨𝐦𝐩𝐚𝐧𝐲'𝐬 𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐲 𝐰𝐢𝐭𝐡 𝐚𝐠𝐫𝐞𝐞𝐦𝐞𝐧𝐭𝐬 𝐦𝐚𝐝𝐞 𝐰𝐢𝐭𝐡 𝐫𝐞𝐠𝐮𝐥𝐚𝐭𝐨𝐫𝐲 𝐛𝐨𝐝𝐢𝐞𝐬 𝐢𝐬 𝐩𝐚𝐫𝐚𝐦𝐨𝐮𝐧𝐭. Key takeaways for businesses: 1) Compliance is a continuous process - Regularly review and update your systems and controls to meet regulatory expectations and avoid potential fines. 2) Risk assessments are essential - Frequently evaluate your risk exposure and adjust your AML program accordingly to maintain compliance. 3) Engage with regulators - Maintain open communication with regulatory authorities and demonstrate transparency in your financial crime prevention efforts. In the ever-evolving fintech landscape, businesses must prioritize adherence to their commitments and foster a strong compliance culture to prevent costly penalties and damage to their reputation. It's all about commitment! #fintech #fincrime #aml #screening #sanctions

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HSBC has pledged not to close any more branches until at least 2026 amid political and regulatory pressure to maintain access to cash on UK high streets. The lender, which has closed 743 branches since 2015, has also allocated a £50 million spend on refurbishing its remaining 327-strong branch network. The move comes as the Financial Conduct Authority introduces new access to cash rules which come into force this month. Under the new guidance, banks and building societies will need to weigh up if local communities lack access to cash services, like branches and ATMs, and plug significant gaps. Since January 2015, banks and building societies have closed 6,058 branches, which represents about 61% of the branches that were open at the start of 2015. So far there have been 410 closures scheduled across 2024, and another 61 have been pencilled in for 2025. This is a very emotional area for people, particularly in rural areas. One of the banks I use is Metro Bank (UK) whose branch policy (as well as their excellent customer service) is why I bank with them. But they are suffering from the economic realities of how people use banking services now. #banking #HSBC #general

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It is a fact of life that when it comes to managing complex financial crime prevention frameworks, it doesn't always go to plan. Things change, evolve and sometimes - just break. But what happens when something has gone wrong or got away from you a bit? What do you need to be thinking about when remediating issues? Whether it be remediating findings from your audit, regulatory intervention or self-identified gaps we have you covered with our tips below. If you want a confidential chat about any remediation activity please let me know. ℹ️ In this blog we outline some strategies for successfully managing remediations: https://lnkd.in/ehXNviZA #fincrime #fintech #compliance

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Another FCA Final Notice re AML controls. 'Someone knew but no-one heard'. Metro Bank (UK)’s variation on my Conduct Risk theme that 'everyone knew but no-one said'. Three points for me. First: junior employees knew but were unable to escalate the issue for resolution. Second: the root cause. An Automated Transaction Monitoring System not receiving all the transactions that occurred. The ATMS could only generat alerts from transactions it saw. The reason for missed transactions was a simple logic error relating to dates. Third: Transactions rejected because of this error were 'bad'. And, went into 'bad folders'. There were no systems to review and clear these bad transactions from the folders. In summary: the puzzle again, how to mitigate that conduct risk and the failure of upward communication. But also, don't fail to check the integrity of data systems. As the Postoffice found, the computer can be wrong. https://lnkd.in/eJDNhpAJ #AML #conductrisk #conduct #risk

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The FCA has announced a fine of £11 million and nearly £100 million in redress costs for TSB due to unfair customer treatment. This serves as a strong reminder of the regulator's increasing focus on consumer duty and fairness in the UK financial services industry. The fine underscores the need for systems and processes that genuinely consider customers' individual circumstances. The way we treat customers needs to evolve -- not just to meet regulatory requirements but to deliver better service and outcomes to customers. I firmly believe GenAI presents a unique opportunity to build systems that offer truly tailored experiences and improve financial journeys for every customer, at scale -- enhancing both efficiency and results across the industry. #FinancialServices #UK #TSB #FCA #ConsumerDuty

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This isn't really a new theme. Efficient controls are not the same as effective controls. Any decent Compliance Monitoring Plan worth the paper it is written on will demonstrate exactly that. FATF ratings are just a measure to use when constructing your own internal country risk assessments. Never go below their rating, but there is no problem to keep the likes of the Cayman UAE at high risk. #aml #compliance #monitoring #fatf #jurisdiction #mlro #mlco #risk #financialcrime #fincrime https://lnkd.in/ewVR4ruD

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https://lnkd.in/en6jrvkP with the FCA fine for starling Bank i have been thinking of ways that businesses that see growth in their future can ensure that they do not fall into the same trap. 1. Automate systems, but ensure that there is regular monitoring to ensure that - lists are correctly uploaded - the screening tool screens all client names 2. ensure that the systems are still suitable for increased troughput. As a business griows more clients are onboarded. If the system cant cope you need to change it. 3. think ahead - it is better to update or change the system before the growth in the business. This is better but difficult to do as the board may not want to spend the money before the revenue has increased, but hindsight shows us it is better to be prepared. 4. Continually test the systems via audit, infernal audit or QA testing. 5. If you ae under the VREQ ensure that when told to stop an action that this is done! Does anyone have any other thoughts?

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Wow, #Monzo is pioneering and innovating Fraud Management again, making sure our valnurable ones are more secured. Always stepping forward and bringing new approaches for #scamprevention and #fraudprevention

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Monzo's new features for fraud are amazing 📍 Known locations or "leave your money at home". Places you're comfortable moving large amounts of money but fraudsters are unlikely to access 🤝 Trusted contacts. If a large transfer is requested your trusted friend must approve. Hugely helpful if your phone is stolen or for vulnerable populations. 🤫 Secret QR codes. Print out a QR code and keep it in a safe place to scan when needed. If these aren't available the fallback is step up KYC. 🧠 Thoughts - All of this is possible with smart device and user behaviour tech but the user education and experience is key - I love how these are announced to a community. Show me another large bank who does that well? - You never see the big banks innovating on these types of features even though they talk a lot about "trust" being their most - I give it a year before most other big banks have copied and pasted these features. Let's raise the bar

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❌ You can't afford to have a backlog. In Financial Crime, some backlogs will push you dangerously close to the edge of non-compliance (if not over the edge). But it happens.   ℹ️ The team at DCM has put together a list of avoidance techniques to detect issues and promote a culture of vigilance. Are your controls holding up and are they effective? Reach out to our team if you need any support: info@dcmoperations.com #FinancialCrime #KYC #Backlog #Remediation #ManagedService #DearCEO #AMLCompliance

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The FCA has published a consultation paper (CP24/9) proposing updates to its Financial Crime Guide. The guide covers areas such as anti-money laundering, terrorist financing, bribery and fraud. Read the insight here: The key proposals for the FCA’s Financial Crime Guide - IQ-EQ (iqeq.com) #iqeq #FCA #FinancialCrimeGuide #Regulatory #Compliance

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The Final Notice includes the word "governance" eight times and the word "culture" does not appear at all. The narrative seems to be that the imperative of delivering growth overtook the necessary focus on the control foundations -not an entirely new theme! But given that the question of how regulators supervise culture, and risk culture in particular, is a hot topic, I would have liked to read a little more analysis about the prevalent business culture in this Final Notice. #culture #riskculture #supervision

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The UK Financial Conduct Authority (FCA) has set out its five-year strategy to support the competitiveness of the UK economy. Key priorities include improving market resilience, reducing financial crime and fostering competition. However, city lawyers have expressed scepticism, labelling the approach as overly familiar and questioning its effectiveness. Meanwhile, a report by the All-Party Parliamentary Group on Investment Fraud and Fairer Financial Services has criticised the FCA as "incompetent at best, dishonest at worst." They cited a lack of accountability and a failure to protect consumers after an examination of the regulator spanning nearly three years.   They called for a supervisory council, similar to that created in Australia; changes to the way the FCA is funded; the removal of the FCA’s immunity from civil liability to consumers; and a new leadership team, if necessary. https://lnkd.in/dzQpCQSq

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Countless press articles over the past few days covering Monzo Bank posting its first annual profit of £15.4m since launching in 2015 (including this latest one from the Financial Times below) The business is now valued at $5.2b. Lot's of questions (mostly dodged!) about the potential of a London listing or the prospect of a US listing with a growing US focus. Also confirmation that it’s in the early stages of expanding into the broader European market via a new base in Ireland which is exciting. The company said that it expects to grow its customer count to 11 million in the coming year under the leadership of TS Anil. The UK neobank scene appears to be thriving which is great. We currently manage more than 40,000 retail investor positions in Monzo from when they invested in the company between 2016 and 2018. Investors who participated in the 2016 round came in at a pre money valuation of £23.6m 😎 https://lnkd.in/eHcsex_u

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The FCA has fined Starling Bank Limited £28,959,426 for financial crime failings related to its economic sanctions screening. It also repeatedly breached a requirement not to open accounts for high-risk customers. #economiccrime #financialinstitutions #financialcrime #duediligence #antimoneylaundering #antibribery #complianceofficers #boardofdirectors #sanctions https://lnkd.in/eqT9hnfp

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💥 New security controls have been introduced by the team over at Monzo Bank. This trio of new measures - known as Known Locations, Trusted Contact and Secret QR Codes - will aim to provide a much-needed layer of protection for customers when making large transfers or taking out savings.   The opt-in will require customers to select at least two of the three security controls (and will be in addition to the typical biometric of PIN authentication checks they already use).   ⚖ Getting the balance of friction and convenience in payments has its challenges. Sure, consumers want it to be easy, but the industry has a responsibility to prevent fraud and adding friction is a key part of that.   Not only are banks battling with friction and convenience, but the upcoming APP fraud requirements are adding even more pressure by requiring them to reimburse victims.   😢 It's not easy!   But compliance must be embedded in a firm's culture, just as firms are constantly seeking to evolve, innovate and protect their customers. (Drop me a note if you want to chat about how to make this work 👀 ).   ( ⬇ Link to the The Fintech Times article - https://lnkd.in/e4Kcwytx ) #fraud Thistle Initiatives

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