The UKFIU has been working with the NECC, FCA, and members of the Banking SARs Working Group on a range of initiatives designed to improve efficiency of the SARs regime and support Systems Prioritisation objectives. One of these recent initiatives was a review of the position relating to the submission of a SAR where a regulated entity’s customer has been the victim of fraud.
Currently, when a customer becomes a victim of fraud, the victim’s financial institution (Entity A) notifies the perpetrator’s financial institution (Entity B) of the fraudulent transaction. In many cases, both financial institutions then submit separate SARs to the UKFIU about the same incident.
Following detailed analysis, it has been agreed that the perpetrator’s financial institution (Entity B) is better placed to submit a more informed and useful SAR to the UKFIU, as they hold key information about the account receiving the funds.
The Proposal
If the victim’s financial institution (Entity A) has notified the perpetrator’s financial institution (Entity B) about the fraudulent transaction, then Entity A may – based on its own risk appetite – choose not to submit a SAR in relation to the fraud victim. The perpetrator’s financial institution (Entity B) would then provide the primary SAR, containing fuller and more actionable intelligence.
This approach helps both financial institutions and the UKFIU focus their time and resources on high‑risk, high‑value intelligence, rather than producing duplicative reports with limited system benefit. A similar approach has already helped improve efficiency through the recent raising of the DAML threshold.
Regulatory and Governance Support
The NCA and FCA have reviewed this proposal and confirmed that they support this approach.
The System Prioritisation Governance Group (SPGG) – co‑chaired by the NCA and FCA and attended by Home Office and HM Treasury – has also formally ratified this position.
Next Steps for Regulated Entities
It is now for individual entities to consider the proposal and decide, in line with their own risk appetite and reporting obligations, whether to implement any operational changes to reduce duplicative fraud victim SARs.
Source: UK Financial Intelligence Unit
