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FCA fines Guaranty Trust Bank (UK) for AML failures – what are the lessons learnt?

FCA fines Guaranty Trust Bank
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The Financial Conduct Authority (FCA) has fined Guaranty Trust Bank (UK) Limited (GT Bank) £7,671,800 for serious weaknesses in its anti-money laundering (AML) systems and controls between October 2014 and July 2019.

In a statement issued by the FCA, the regulator said that the bank failed to undertake adequate customer risk assessments, often not assessing or documenting the money laundering risks posed by its customers.

The bank also failed to monitor customer transactions and business relationships to the required standard.

The FCA said these failings were repeatedly brought to the attention of GT Bank by internal and external sources, including the FCA, but despite this, the bank failed to take appropriate steps to correct them.

From early 2018 GT Bank stopped taking on new customers. Later that year GT Bank agreed to wider voluntary restrictions on business, given the FCA’s ongoing concerns. Requirements remained in place until the middle of 2021 when they were lifted after the bank completed a remediation plan, checked by an independent third party.

In its statement, the FCA called GT Bank’s conduct ‘egregious’ because this was not the first time the bank had faced enforcement action in relation to its AML controls. The bank was previously fined £525,000 in August 2013 for serious and systemic failings.

Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said:

‘GT Bank should have acted quickly to put in place adequate AML controls following its fine in 2013 but it failed to do so. GT Bank did not develop a plan that was capable of addressing its AML weaknesses, exposing it and the broader market to financial crime risks for a prolonged period.’

Lessons for financial firms

This latest FCA fine for failures in AML controls, highlight the importance of firms having a strong financial crime framework in accordance with the regulatory requirement. The fine serves as a reminder of the real threat money launderers pose to financial organisations.

The FCA requires firms to have in place effective AML controls to mitigate the risk of individuals and organisations using financial institutions to circumvent restrictions designed to prevent them benefitting from assets obtained by illegal means.

‘Firms must protect themselves and those dealing with them from financial crime risks, especially money laundering. The FCA is determined to ensure the market for financial services is safe, clean and trusted with robust systems and controls in place to stymie financial crime. The FCA will continue to take action when these standards are not met.’, commented Mark Steward of the FCA.

How Neopay can help

With financial crime becoming more sophisticated, a multi-layered approach to financial crime compliance and identity proofing is essential. Based on the variety of unique risks that emerge from individuals, transactions, and contact channels, it is important to assess both the individual and the business (if applicable) with a need for real-time behavioural data/analytics. Our automated 123signed platform leverages date analytics to assess risk and behaviours in real-time, allowing your compliance teams to act on relevant data and combat money laundering within their operations.

We also provide Financial Crime audits to help your firm identify any gaps or weaknesses in its financial crime framework. Along with tailored solutions to support your compliance and Money Laundering Reporting Officer (MLRO) in enhancing your customer risk assessment, to ensure geographical risks are considered in accordance with the regulatory requirements.

Why not contact us to find out more about how we can support your business in meeting your AML requirements.

For further information on how you can cut the cost of your AML compliance, check out our guide here.

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