Financial firms’ anti-money laundering controls aren’t keeping up with business growth, the U.K.’s Financial Conduct Authority (FCA) says.
The regulator warned a broad group of firms that are required to comply with anti-money laundering regulations about common weaknesses in their financial crime controls.
“Financial crime is a priority for us and initial findings from our data-led review of a sample of [firms] indicates that some are still not getting the basics right,” the FCA said in a release.
The regulator said it found discrepancies between firms’ registered activities and the business they actually engage in; controls that haven’t kept pace with business growth and aren’t properly resourced; and failures to properly assess the risks of client activity and firms’ own activities.
As a result, the regulator called on firms to review their financial crime controls within the next six months — and to quickly correct any issues.
Firms that don’t follow through could face further regulatory action, including possible enforcement action.
“Poor financial crime controls make it easier for criminals to abuse the financial system and damage the integrity of U.K. markets,” said Emad Aladhal, director of the FCA’s anti-crime unit, in a release. “We have made fighting financial crime a priority and though we’ve seen progress generally amongst the firms we supervise, this report highlights some basic failures.”