Financial crime is an ongoing area of focus. The changes in the regulatory landscape, coupled with the growth in innovative technology, coupled with the increase in the number of sophisticated cyber threats means that financial crime will be a focus area and should not be understated.
It also means that MROs and AML/KYC teams all focus on a number of themes such as enhancing their technological innovation and using technology to be able to detect any illicit transactions and complex transactions which may give rise to suspicions of money laundering and it could also provider greater cost efficiencies. This means that firms will also need to take into account training requirements and human intervention reviews when implementing new technological systems.
Another theme in financial crime relates to the tightening on KYC processes, for example, national competent authorities are expecting firms to tighten their KYC processes in line with the fifth money laundering directive as implemented at national level. And another theme in financial crime relates to sanctions. Sanctions regimes are ever changing and are ever more complex. In order to have an effective sanctions compliance regime, firms must continue to enhance their screening processes so that they can take into consideration not only changes in the business and in the business strategies but also changes in the political landscape. So firms need to keep abreast of the changes in the sanctions regime as we expect these to be fairly divergent in the coming years.
I’ve just mentioned a few themes and these appear to be reoccurring themes, however firms must remain vigilant and continue to find ways in improving their anti-money laundering counter terrorists financing and sanctions programmes.
Operational resilience is also another focus area as indicated by the FCA and the PRA. It’s defined as the ability to prevent, to adapt, to recover from and to learn from operational disruptions and the FCA do expect through their new requirements and expectations that firms should be able to continue with the supply of products and businesses to people, to other businesses and to the financial services sector as a whole even in the event of a severe operational disruption. This means that firms will need to look at their business continuity plans, their disaster recovery and resolutions packs and also embed these changes at a board level within the business strategy.