The Financial Conduct Authority (FCA) has issued important updates to its Financial Crime Guide, following a public consultation on proposed changes. These revisions are aimed at enhancing firms’ understanding of what is expected in terms of financial crime systems and controls, ensuring they remain effective and in line with current regulations. The changes reflect both insights from the FCA’s supervisory work and feedback from industry stakeholders, with the final guidance coming into effect immediately.
Key updates in the FCA’s Financial Crime Guide
Here’s a breakdown of the significant changes and areas of focus:
- Sanctions
The guidance has been updated to reflect lessons learned since the Russian invasion of Ukraine. The FCA is clarifying how firms should manage sanctions screening, particularly for payment and cryptoasset businesses. It also introduces new self-assessment questions and emphasises the importance of senior management accountability. - Proliferation Financing (PF)
In response to the 2022 changes in the Money Laundering Regulations (MLRs), the Guide now explicitly addresses the need for firms to conduct PF risk assessments. This aligns with the growing focus on preventing the financing of weapons proliferation. - Transaction Monitoring (TM)
The FCA has provided updated guidance on the implementation and monitoring of transaction monitoring systems. It encourages firms to adopt innovative technologies such as AI and machine learning to increase efficiency, while still adhering to regulatory standards. - Cryptoasset Businesses
The Guide now more clearly includes cryptoasset businesses under its remit, outlining their specific responsibilities under the MLRs, including Anti-Money Laundering (AML) and Counter Terrorist Financing (CTF) obligations. - Consumer Duty
The Guide emphasises that firms must ensure their financial crime systems and controls align with the Consumer Duty rules, ensuring firms act in the best interest of retail customers. - Consequential Changes
The updated Guide includes revised case studies, removing outdated references and ensuring functional web links. It also offers clarifications on the roles of the Money Laundering Reporting Officer (MLRO) and Senior Manager.
How Neopay can support your firm
The FCA’s changes mean that firms must reassess and potentially update their financial crime systems and controls. This includes internal policies, monitoring systems, governance structures, training, and more. Neopay is ideally positioned to assist in navigating these complex updates and ensuring your firm remains compliant.
Here’s how we can help:
- Gap Analysis: Neopay can perform a thorough assessment of your current financial crime systems and controls to identify areas that need improvement based on the new FCA guidance.
- Policy and Procedure Updates: We can assist in revising your policies and procedures to align with the updated expectations, including the addition of PF risk assessments and stronger sanctions monitoring protocols.
- Training and Awareness: Our tailored training programs ensure that your team understands the new requirements and how to apply them effectively. We can help you meet the Consumer Duty and train staff on the latest transaction monitoring technologies and sanctions compliance.
- Audit Support: Neopay provides independent audits of your financial crime systems, giving you peace of mind that your controls are robust and meet regulatory standards. We ensure your approach to financial crime risks is in line with both FCA expectations and best practices.
- Ongoing Compliance Support: Neopay can be a trusted partner in maintaining ongoing compliance, providing regular updates and advice as the regulatory landscape evolves. We monitor FCA consultations and policy updates, ensuring your firm stays ahead of the curve.
Next steps for firms
As the FCA’s revised Financial Crime Guide is effective immediately, firms must act quickly. Neopay encourages businesses to:
- Review the updated guide: Familiarise yourself with the changes to ensure your systems and controls meet the new expectations.
- Assess your compliance: Consider conducting a gap analysis to identify areas needing adjustment.
- Implement changes: Update internal policies, improve transaction monitoring, and train staff on new protocols.
To find out more about how we can support your business, contact our team here.
To read the FCA’s full Financial Crime Guide changes and feedback, click here.
