The UK’s Financial Conduct Authority has released an official warning towards the UK retail banking sector. The warning addresses the banks’ inability to remain integral, as well as the institutions’ weakness in controlling breaches of AML laws and similar codes of conduct.
FCA Director of Retail Banking & Payments Supervision David Geale is the one who addressed the retail banking sector in a letter where he expressed his concern for the banks’ weak financial crimes controlling systems. He and his department had previously ran a thorough assessment of these systems.
The letter was mainly concerned with the FCA’s disappointment that it continues to notice weaknesses across firms. It also reveals that the main areas of concern are those tied with governance and oversight of pre-existing systems. It also shifts the readers attention to the lackluster suspicions facticity reporting, loopholes in risk assessment and transaction monitoring.
The FCA has asked these institutions to complete a “gap analysis” and to strengthen all financial crimes controlling systems as required. All this has to happen before September 17th. Should the banks fail to meet the deadline or fail to meet the requirements, the overseer has warned that it will take the necessary enforcement actions.
The UK financial watchdog reminded these organizations that previous failures to meet similar requirements had led to the FCA appointing an expert to conduct detailed reviewed, or even restricting business practices and at times enforcing the law.