How you can enhance your financial crime controls

Updated: Jun 22

The Financial Conduct Authority has released its key findings from its recent review of financial crime controls at several challenger banks. There are quite a few takeaways you can take to actively enhance your systems and controls.


Why should you care

As a financial institution, you will have to deal with some elements of financial crime and it is vital you remain cognisant of industry best practices and the concerns raised by the regulator.

What are the financial crime controls to consider

The internal financial crime controls cover

  • governance and management information

  • policies and procedures

  • risk assessments

  • identification of high-risk / sanctioned individuals or entities

  • due diligence and ongoing monitoring

  • communication, training and awareness

Questions you must ask your team

  • What do your customer onboarding and customer lifecycle review look like

  • What type of information do you take about your customer, such as income, source of their wealth, the reason for account opening

As a takeaway review whether you are obtaining the full customer information (including income, the purpose of account and occupation details) to determine their customer’s risk

  • How do you manage Politically exposed persons or conduct enhanced due diligence on customers flagged as higher risk either during onboarding or during the customer lifecycle review?

  • Is there a clear process for identifying and applying EDD to high-risk customers that are not politically exposed persons (PEPs)

  • Do you have a customer risk assessment in place? This is separate from a financial crime risk assessment. If so, how often is it reviewed?

Customer risk assessments are essential to your firm ensuring that the risks a customer relationship presents to you are captured

  • Does your financial crime risk assessment adequately consider money laundering and terrorist financing risks?

What to do next

  • Conduct a gap analysis of the findings of the review against your current financial crime framework

  • Review your customer risk assessment and enhanced due diligence measures, particularly in light of the heightened risk of sanctions evasion.

  • Ensure your business-wide risk assessment appropriately takes into account the National Risk Assessment.

  • Be prepared to update your financial crime framework against a backdrop of changing financial crime risks.


If you would like to hear more about how MEMA is supporting firms address their financial crime controls, please get in touch with a MEMA Consultant today