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Firms must be FCA’s ‘eyes and ears’ in fight against financial crime

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FCA calls for partnership between firms, regulators and government in fight against financial crime 

Sarah Pritchard, an executive director at the Financial Conduct Authority (FCA) highlighted that the cost of living crisis will lead to criminals trying to scam and exploit people even more.  She asked financial firms to help the regulator respond to these risks.

In a speech earlier this month, Pritchard said: “We are already seeing more scams such as loan fee fraud, ghost broking, and false access to rebates from utility companies, and we anticipate a potential rise in people being recruited to act as money mules too, where they are asked to transfer money through their accounts by strangers in exchange for a payment.”

“Fighting financial crime underpins the FCA’s priorities and we are taking action at pace on areas from spotting sanctions-busting to driving improvements on money laundering controls and raising consumer awareness through Scamsmart campaigns”

She said the FCA aimed to harness the ‘force multiplier effect’, seeing professionals in firms “scanning and being alert to red flags”. She called for a “a whole system response” that sees firms interpret the “clues” from conversations and customer behaviour to “limit the threat”, as well as wider use of technology that identifies unusual patterns of activity. Pritchard also outlined FCA plans to test how financial services and other sectors can share data and analytics in real time, helping to spot fraud at its source.

“[The FCA] can reach into financial services not just to set standards and inspect adherence, but to find solutions. It is that partnership between firms, regulators and government, that holds the key.” Prichard added.

Pritchard also reiterated the regulator’s stance on non-compliance. Since 2018 the FCA has fined more than 10 banks and other firms for money laundering weaknesses. The fines issued have totalled over £665m. Earlier this year, it also ordered the closure of all ‘crypto ATMs’ operating in the UK, which it ruled had been operating without regulatory permission.

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