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Blurred lines: weaknesses in retail banks’ financial crime controls

Compliance Monitor

Blurred lines: weaknesses in retail banks’ financial crime controls

A new letter from the regulator to chief executiveson their anti-money laundering systems identifies confusion between lines ofresponsibilities, sketchy risk assessments and due diligence, flawedtransaction monitoring, as well as unclarity around SARs. Banks appear to bemore rigorous in some areas of their operations than in their financial crimecontrols, suggests Denis O’Connor.

The Financial Conduct Authority recentlypublished a ‘Dear CEO’ letter that it sent to the chief executives of retailbanks operating in the United Kingdom, in which the regulator outlined commonfailings in banks’ financial crime systems and controls. [1] While it observedsome examples of effective control frameworks and good practice, the supervisornoted it was “disappointed to continue to identify, across some firms, commoncontrol weaknesses in key areas of firms’ financial crime systems and controlframeworks”.

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