AML Regulators: Financial Conduct Authority (UK)
Who is the Financial Conduct Authority (FCA)?
The Financial Conduct Authority (FCA) is an independent, non-governmental organisation that governs the United Kingdom’s financial services industry. The FCA, established in 2013, was institutionalized to replace the Financial Service Authority (FSA) in the United Kingdom. This shuffling of governing bodies was brought upon by the Financial Services Act (2012).
The FCA marked an improvement on the FSA, implementing a new regulatory framework and maintaining the stability of the UK’s financial markets and also ensuring safe conduct by its financial service firms. Essentially, the body regulates financial transactions to protect customers and maintain the integrity of the UK financial system. The FCA is responsible for legislation and regulations concerning money laundering and terrorist financing. Money laundering acts and laws are created with the expertise of the FCA. The organisation’s work focuses on trade associations, consumer groups, domestic regulators, EU legislators, and a list of other stakeholders.
As the core financial service authority in the United Kingdom, the FCA regulates the conduct of more than 59,000 businesses. They also act as the prudential supervisor for 49,000 firms and set specific standards for 19,000 firms. In total, the UK financial services employ over 2.2 million people and contribute around £65.6bn in tax to the UK economy annually.
The FCA works alongside the Prudential Regulation Authority to build financial regulations in the region.
Under the Financial Services and Markets Act (2000) as amended, the Chief Executive of the Financial Conduct Authority is appointed by the Treasury. The current Chief Executive is Nikhil Rathi.
Powers of the Financial Conduct Authority (FCA)
The powers of the Financial Conduct Authority over the UK’s financial services industry are extensive. The body has the comprehensive power to suggest, create, and enforce mandates, including setting regulations and investigative powers. The FCA is authorized to investigate both institutions and individuals suspected of violating any financial regulations. Their work is governed by the Financial Services and Markets Act (2000). The body is accountable to the UK Treasury and Parliament. Being an NGO, the FCA does not receive any government funding. Instead, the body charges a fee from every authorized firm that carries out financial activities regulated by the FCA and other investment exchange bodies.
The FCA’s powers focus on three primary objectives:
- Securing an appropriate degree of protection for consumers
- Enhancing market integrity and protecting the United Kingdom’s financial system
- Promoting healthy market competition to serve the interests of consumers
Industries, Sectors, and Firms
Banks
Financial Services are regulated by The Financial Services Act (2012), which was introduced as a new system and implemented to protect and boost the UK economy.
The FCA monitors banks to ensure they:
- Treat customers fairly
- Encourage healthy competition and nurture innovation
- Aid the FCA in identifying potential risks before they manifest, so they can take preventive measures
Mutual Societies
The UK is home to over 10,000 mutual societies.
The FCA ensures that they:
- Register new mutual societies
- Keep public records
- Receive annual returns
Financial Advisers
Rules for Independent Financial Advisers (IFAs) came into action in 2012.
To be authorised as an IFA, businesses are required to:
- Provide a wide range of retail investment products
- Offer honest, unbiased, and unrestricted advice to consumers based on a fair and comprehensive analysis of the market
Functions of the Financial Conduct Authority (FCA)
Supervision
The FCA oversees and establishes the minimum standards for financial services products, including credit cards, pensions, investments, and ISAs. These services must meet the FCA’s standards to enter the market and firms may be forced to withdraw or change products that do not make the cut. The FCA has complete authority to ban any financial product for up to one year. They can also impose an indefinite ban if they deem it necessary.
Regulations
The FCA supervises banks and other financial payment institutions. They ensure that customers are treated fairly, markets operate safely, and the growth of the economy is not stifled or posed with risks. A key area regulated by the FCA is money laundering. The FCA creates and implements the rules against money laundering that must be followed by banks and other financial institutions. Organisations work hard to achieve compliance with these laws, and many are using AML software to carry out the process. They have to monitor suspicious activity, perform risk assessments on their clients, and appoint compliance officers. Due to the new digital nature of the financial industry, anti-money laundering regulations are often subject to change and updates. Banks and other financial institutions must adhere to these regulations, and AML software aid them in doing so. The anti-money laundering software, especially if created using machine learning, are capable of keeping up with the ever-evolving nature of financial regulations and carry out real-time monitoring.
Authorisation
Every financial service provider, consumer credit firm, and investment firm in the UK must be registered with and authorised by the FCA. The vetting process for this is thorough, and an application, which is chargeable, can take between six to twelve months to get approved. The most important factor while authorizing a firm is their ability to meet the regulatory standards and be proactive and work with the FCA.
FCA Beyond the UK
The FCA engages with their regulatory peers, such as:
- The European Union
- EU institutions
- European Supervisory Authorities (ESAs)
- European Securities and Markets Authority (ESMA)
- European Banking Authority (EBA)
- European Insurance and Occupational Pensions Authority (EIOPA)
Around the world, the FCA is dedicated to international engagement with other global standard setters and regulatory bodies. The FCA is a member of:
- International Organisation of Securities Commissions
- International Association of Insurance Supervisors
The FCA participates in the UK’s membership of the Financial Stability Board, as well as the government’s efforts with the Financial Action Task Force. They are also members of the International Financial Consumer Protection Organisation (FinCoNet) and work with the Organisation for Economic Co-operation and Development (OECD).
References
https://www.bloomberg.com/profile/company/2630281Z:LN
https://www.gov.uk/government/organisations/financial-conduct-authority
https://www.investopedia.com/terms/f/financial-conduct-authority-uk-fca.asp
https://www.fca.org.uk/firms/financial-crime/money-laundering-terrorist-financing
Leave a Comment
How sharing information between institutions helps detect money laundering
The Financial Action Task Force (FATF) says institutions should be sharing information between them to detect money laundering more easily and comply with the Anti-Money Laundering (AML) and Countering the Financial of Terrorism (CFT) requirements. M...
EU Proposes new regulations to take anti-money laundering to the next level
Earlier in July, the European Commission came up with four legislative proposals. One of these was its 6th Anti Money Laundering Directive (AMLD 6) to support Anti-Money Laundering (AML) and countering the Financing of Terrorism (CFT) framework in Eu...
The Rise in Cryptocurrency Money Laundering Cases in 2021
Cryptocurrencies have been around for a while now. We’ve all heard of Bitcoin, Ethereum and Litecoin. As technology develops quickly, financial criminals keep up the pace to find new ways to exploit it via money laundering. Cryptocurrencies are sti...
How Technology Can Ensure Effective AML Information Sharing
We are in a digital-first economy where goods and services delivery has moved significantly online. The availability of financial services related to investment, payments, money transfers and lending online has aided financial inclusion in a commenda...
Why Neo Banks Might Need a Different Customer Risk Assessment Approach
As financial institutions go increasingly digital in the wake of the COVID-19 crisis, physical verification of customers’ identity and paper forms might become practices of the past. In many countries, neo banks and other regulated financial servic...
Transaction Monitoring in Fintech: Challenges and Solutions
While the COVID-19 pandemic has affected the global economy with long-lasting implications for companies and consumers, the Fintech sector has largely been resilient with notable growth across most geographies. A joint study of the sector by the Worl...
Getting Ready for Future: An AML Compliance Guide for Fintechs
The internet revolution and the smartphone revolution have changed the course of operations in many industries. The digital era brought about significant enhancements to economic utilities — in form, time, space and possession — and helpe...
Covid-19 and compliance challenges for payment companies
The COVID-19 pandemic has brought in fundamental changes to many industries, and the payments sector is no exception. Consumers across the globe now have a different approach as they consider commerce and payment options. They tend to flock to those ...
Assessing AML Compliance at Neobanks: Issues and Solutions
Considered the digital era’s answer to financial inclusion, neo-banking is rising to prominence, shattering the historical monopoly and hegemony of traditional banking. As populations across the globe are increasingly being connected to the interne...
How Criminals Launder COVID Funds via Online Investment Platforms
Fraud targeting governments’ pandemic-related welfare programs have seen criminals exploiting these schemes ever since countries started helping their citizens and businesses. If reports are correct, fraudsters benefit immensely from the US governm...
Crowdfunding: Yet Another Unconventional Means to Launder Money
Having transformed many ideas into profitable businesses, crowdfunding, a new-gen investment trend enabled by the internet, has become the first resort for many entrepreneurs and small businesses. There are various crowdfunding platforms in play, inv...
The Crackdown on Shell Companies and the Role of Technology
The Anti-Money Laundering Act (AMLA) 2020, enacted as part of the National Defense Authorization Act (NDAA) 2021 of the US in January this year, had many key provisions to take the Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT)...
Tookitaki Powers AI-Driven Anti-Money Laundering Solution Using HPE GreenLake
Hewlett Packard Enterprise (HPE) announced a key collaboration with Tookitaki to provide a new offering designed for banks and financial institutions across Asia-Pacific. The new offering delivers Tookitaki’s artificial intelligence (AI) powered ...
AMLA 2020: 8 Key Provisions that Financial Institutions Required to Know
The US Congress passed the National Defense Authorization Act (NDAA) 2021 on January 1, 2021, addressing a variety of pressing concerns related to the nation’s security. The act included a number of reforms related to the country’s response to an...
The Rising Case for RegTech to Address AML Risks Amid COVID-19
Emerged as a subset of FinTech, the Regulatory Technology (RegTech) industry has now gone more mainstream, thanks to regulators and industry practitioners. Recently, there have been many pro-RegTech communique and reports, highlighting that the COVID...
Hakrinbank Selects Tookitaki to Ensure Sustainable Financial Compliance Monitoring
Tookitaki announced a partnership with Hakrinbank, a leading South American bank based in Suriname, to fortify its Anti-Money Laundering (AML) detection and alerts management capabilities. To improve its legacy system and augment its ability to bett...
Breaking Barriers: 5 Key Insights on RegTech Adoption
HKMA in a report shared comprehensive hands-on experience and insights from respondents to better understand the factors and dependencies affecting AML/CFT Regtech adoption. The regulator collaborated with 10 mature RegTech adopters to build out a co...
How to Address Present-day Sanctions Screening Pain Points with AI
Sanctions risk of financial institutions is evolving in line with the global social, economic and political changes. As seen in recent news, governments across the globe are increasingly relying on sanctions as an important measure for political fore...
Tookitaki Got Selected for FinTech Program: Asia meets Tokyo
Tookitaki has been listed among 8 Fintech startups in Asia for FinTech Program: Asia meets Tokyo, an accelerator launched by the Tokyo Metropolitan Government (TMG). We have been selected for our anti-money laundering (AML) solution having a unique m...
AML Alert Management: How AI can Augment Your Compliance Efficiency
The financial sector is facing one monster of a problem at the moment. As today’s financial institutions deal with millions of daily transactions, several thousands of routine financial transactions are being flagged every month, leading to many un...
Tookitaki Recognised for Innovative Use of AI & Machine Learning
Tookitaki has won the Regtech Award for AI & Machine Learning and was highly commended in the solutions category for AML/CTF Compliance, in the 3rd Regulation Asia Awards for Excellence 2020 in an online ceremony on 15 December 2020. Tookita...
Money Laundering via Cryptocurrencies: All You Need to Know
Technological advancements have given criminals faster and safer options to wash their ill-gotten money. There is no doubt that cryptocurrencies are very useful technology innovation that helps individuals and institutions access financial products a...
CNA 938 radio interviews Tookitaki Co-founder Jeeta Badopadhyay
Tookitaki Co-founder and COO Jeeta Bandopadhyay was named among the Singapore 100 Women in Tech (SG100WIT) List in September 2020. A collaboration between the Singapore Computer Society (SCS), IMDA, SG Women in Tech and Mediacorp, the inaugural SG100...
Need for New Customer Risk Rating Models: Not All Customers Are Created Equal
Being estimated at between US$800 billion to US$2 trillion every year, money laundering is a serious problem for the global economy. While regulators and financial institutions are working hard to prevent and reduce the crime, launderers are becoming...
Is AML Compliance Heading for a New Normal in the Age of Digital Payments?
Increased digitization has influenced various businesses and brought in a paradigm shift in the way they create business models and approach growth opportunities. Moving away from conventional transaction modes such as cash and checks, banks and FIs ...
Excel to AI: How Reconciliation Tools Evolve for Better
In the world of finance, reconciliation is the process of comparing two related sets of records or two accounts at the end of a specific accounting period to find out if account balances are matching in both records. Periodic reconciliation of accoun...
Lessons Not Well Learned: 2020 AML Fines Cross 2019 Total
If research is to be believed, institutions across the globe have not done enough in the anti-money laundering (AML) compliance area. Data from consultancy Duff & Phelps revealed that AML fines in the first six months of 2020 reached US$706 milli...
Exploring AML Risks in COVID-Era and the Ways to Address Them
The world continues to battle the COVID-19 pandemic and the crisis it brought in is unprecedented in the history of humankind. While there are a number of pandemic-related factors contributing to the expected crisis with financial services, financial...
AML Amid COVID-19: Watch out for These FBI-listed Fraud Schemes
There has been a rise in the number of cybercrimes and fraud schemes across the globe ever since the proliferation of the COVID-19 pandemic. Criminals, in general, are taking advantage of people’s scare, helplessness, and the need for immediate fin...
OCC Spring Risk Perspective: 5 Takeaways on Compliance Risk
Despite its general strength, the US federal banking system is apparently susceptible to the ongoing economic weakness caused by the rampant spread of coronavirus. Earlier this month, The US Office of the Comptroller of the Currency (OCC) published i...
How Criminals Used COVID-19 Sales Pitch to Defraud, Launder Money
As the world is working hard to contain the spread of the COVID-19, criminals continue to take advantage of the pandemic. They are devising sophisticated methods to defraud people and launder the criminal proceeds using the financial system. The late...
5 Top Myths and Facts about AI Implementation in AML Programs
We are more confirmed about the power of Artificial Intelligence (AI) to transform lives and businesses now. There are countless possible applications of AI and machine learning at present, and we see and hear exciting ways how these modern technolog...
Typology Repository Management: Solving AML Problems Via Collective Intelligence and Continuous Learning
Despite its general strength, the US federal banking system is apparently susceptible to the ongoing economic weakness caused by the rampant spread of coronavirus. Earlier this month, The US Office of the Comptroller of the Currency (OCC) published i...
Money Laundering Amid COVID-19: What Regulators Across Globe Say
As the world continues to fight against the COVID-19 pandemic, there are reports that criminals are taking advantage of the difficult situation. They are seizing the moment to proliferate their criminal activities, earn undue profits and transfer of ...
How will Art Cease to Be a Preferred Money Laundering Vehicle?
Money laundering via high-end art and antiquities is not new yet it is difficult to detect. Art-related money laundering amounts to about US$3 billion per year, according to this blog, quoting the United Nations Office on Drugs and Crime. Criminals o...
Beware! Money Mules in Demand amid COVID-19. Here’s an Effective Cure
If reports are to be believed, cybercrooks are taking advantage of the COVID-19 situation. They are targeting people who were laid off or working from home due to the pandemic to work for them as money mules. For those who are new to the term, money ...
Roundtable Rewind: Embracing Next-gen Tech & Collaboration Key to Sustainability
As a regtech player with a vision to enable sustainable compliance programs in financial institutions, Tookitaki organized a first-of-its-kind industry roundtable in Charlotte, NC, USA to discuss opportunities to innovate current AML programs and mee...
Tookitaki Appoints Industry Veteran Joe Friscia as Advisor
Tookitaki Holding Pte. Ltd. appointed industry veteran Joe Friscia, former President of NICE Actimize and BAE Systems as Advisor to the Company’s Advisory Board. Joe brings over 25 years’ extensive experience in the financial crime and enterpris...
Tookitaki Raises Another US$11.7 million in Series A; Closes Round at US$19.2 million
– by Abhishek Chatterjee, Founder & CEO The Tookitaki team and I are excited to announce that we have raised an additional US$11.7 million in Series A funding, taking the total investment in the round to US$19.2 million. The current round w...
30 Years of FATF: Notable Facts About Global AML Watchdog
The Financial Action Task Force (FATF), the intergovernmental body formed in 1989 to combating money laundering, is celebrating its 30th anniversary this year. Since its inception, the global agency played a key role in identifying and preventing the...
Tookitaki Joins Aite Financial Crime Forum as Sponsor
Technological advances have fundamentally changed the operational landscape of financial institutions. However, there are also new risks emerging in forms of sophisticated financial frauds and complex money laundering patterns. These risks can signif...
Will Machine Learning Replace Compliance Professionals?
The impact of modern technologies such as artificial intelligence (AI) and machine learning on job security has been a widely discussed topic today. Of course, AI has advanced very quickly in the last few years and evolved to outperform humans in a n...
6 Most Prevalent Cyber-Laundering Methods in APAC
Despite being a medium to exchange information in real-time and with scale, the Internet is being misused in several ways. Among the slew of financial crimes facilitated by the Internet, money laundering draws importance due to its gigantic size and ...
ABA Regulatory Compliance Conference: 10 Sessions You Can’t Miss
The 2019 edition of the American Bankers Association (ABA) Regulatory Compliance Conference is a few more days away. Organized by the Washington, D.C.-based trade association, the conference is touted as the “one-stop shop to discuss today’s—an...
Tookitaki AMLS Wins SBR Technology Excellence Award 2019
Tookitaki’s Anti-Money Laundering Suite (AMLS), an end-to-end machine learning-powered transaction monitoring and names screening solution, has bagged the inaugural Singapore Business Review Technology Excellence Award 2019 in the category R...
Watchdogs Grow Optimistic about AI Prospects at Banks
Proper regulation of banking operations is important as any failure in the banking system would affect the wider economy. Therefore, banking is one of the most regulated industries across the globe. Financial regulators ensure that services to the cu...
Pitfall of Black Box AI at Banks: Explaining Your Models to Regulators
The use cases of artificial intelligence (AI) and machine learning in front-office, middle-office and back-office activities at banks are growing slowly but steadily. The major areas of AI play include customer service (virtual assistants, chatbots, ...
AI for Regulatory Compliance at Banks: 4 Assessments Before You Okay the Solution Proposal
Banking is one of the industries where artificial intelligence and machine learning find their applications at a rapid pace. Regulatory compliance within banking is an area which has become a costly and inefficient affair due to complex and never-sta...
We Believe in Innovation, the Key to Survival and Growth
“Innovation distinguishes between a leader and a follower.” -Steve Jobs What comes on the top of your screen when you google the meaning of the word innovation is – the introduction of something new and relevant such as a new idea, method o...
Compliance Functions in Need of a Technological Overhaul. Can Machine Learning be the Game-Changer?
McKinsey in its latest compliance benchmarking survey found that compliance function at financial institutions has reached “an inflection point” and current compliance standards are in an “inchoate state”. The firm has suggested five critical...
Tookitaki Raises US$7.5 mn Series A from Global VCs to Transform Regulatory Compliance
Tookitaki, a regulatory technology company that aims to enable financial institutions to develop sustainable compliance programs, has raised US$7.5 million in Series A round. The round was co-led by London-based Illuminate Financial, an early-stage e...
From Wachovia to Danske Bank: Biggest Money Laundering Cases in Recent Times
Money laundering – the criminal activity of processing criminal proceeds to disguise their origin – is one of the gravest problems faced by the global economy, and its size is growing rapidly. It is estimated that 2- 5% of the global GDP, or US$8...
A Modern Approach to Address the Reconciliation Challenges of Financial Services
Reconciliation of transactions is deemed critical for the smooth running of every financial institution. The speed and accuracy of data reconciliation can distinguish a successful institution from its counterparts. The process is primarily used to id...
Busting a Myth: Compliance Officer’s Job is All About Risk
Regulatory compliance has become a dreadful task for banks after regulators across the globe set stricter norms in the aftermath of the 2008 financial crisis in an effort to prevent financial crimes such as money laundering. Rules have been changed t...
SocGen Goes Next-Gen with Tookitaki Reconciliation Suite
Société Générale leveraged Tookitaki’s Reconciliation Suite to automate the bank’s existing break reconciliation system. Key Challenges Addressed The bank’s finance department was unable to handle new breaks unless code is updated. Current ...
Attending ACAMS Conference in Singapore? Tookitaki Awaits You with Its Disruptive AML Solution
“In today’s era of volatility, there is no other way but to re-invent. The only sustainable advantage you can have over others is agility, that’s it.”- Jeff Bezos Singapore is hosting ACAMS’ 11th Annual AML & Financial Crime Conference ...
MAS’ Stress on Transaction Monitoring for Effective AML/CFT Compliance and Machine Learning is the Answer
Singapore is known for its top-notch AML/CFT regime created through up-to-date legislation, stringent policy and uncompromising supervision to safeguard against the abuse of the city state’s financial system for criminal activities. The country’s...
Mifid II and the Pressing Need for a New Reconciliation Approach
The financial services industry in the EU has been confused with the introduction of a revamped version of the Markets in Financial Instruments Directive (Mifid II). The ambitious regulatory reforms that took almost seven years to be materialized wer...
Is Automated Reconciliation Next to Impossible in Today’s Complex Financial World?
The 2008 global financial crisis and fairly new regulatory requirements like Basel III asked financial institutions (FIs) to cut operating costs and adopt a lean operations structure, pushing FIs to rethink on current reconciliation measures. Most of...
Modern Tech to Reshape US AML Compliance with Regulators’ Recent Handshake
George Bernard Shaw once said: “Those who cannot change their minds cannot change anything.” The past week has seen a significant change of mind from financial regulators in the US in their ardent attempt to combat and prevent financial crimes, e...
Skills Development: We Have Talents and We Strive to Multiply Them
“Mastery lies on an infinite continuum, and as a result, we will never reach the end. We can, however, see to it that we are as far along that continuum as our circumstance allows.” ― Chris Matakas Having continuous learning as one of its core...
It’s Our Fourth Founding Day; Taking a Pause to Cherish Our Simple but Awesome Journey
Today, as we step into our 4th year of foundation, I feel proud and honored to be leading Tookitaki that has been successful in creating added value to all its stakeholders. I was never a CEO and Tookitaki is my first company. I had the passion and d...
Tookitaki Expands into the US with New Office in Charlotte
SINGAPORE, Sept. 24, 2018: Tookitaki Holding Pte Ltd, a leading regulatory technology company, is pleased to announce the official opening of its North American office in Charlotte, NC, in the United States. This new location will serve as the comp...
5 Methods That Modern Money Launderers Use To Beat Detection
Society prepares the crime, the criminal commits it. DID YOU KNOW? Every year, an estimated amount in the range of US$800 billion-US$2 trillion (2-5% of global GDP) is being laundered globally Regulators across the globe imposed US$1.7 billion in fin...
Risk Management Conference: Positive Vibes from All Corners
The Risk Management Association’s (RMA) premier annual event, the Risk Management Conference, came to an end on 6 November, and Tookitaki had the privilege to attend the event which we believe was a success in a number of ways. As a modern-era tec...
Singapore Fintech Festival: Tookitaki to showcase advanced machine learning solutions in financial services
Singapore is assured of the Fintech world’s unwavering attention next week, as the city state, is hosting this year’s Fintech Festival during 12-16 November. Touted as the world’s largest platform for the global FinTech community, the event att...
The RMA Clarion Call to Address Risks and the Tookitaki Way
Risk officers, doing your best today is good while preparing hard for tomorrow is extraordinary. Risk management at banks has become difficult due to operational and regulatory changes. The Risk Management Association’s (RMA) premier annual event, ...
Typology Repository Management: Solving AML Problems Via Collective Intelligence and Continuous Learning
Despite its general strength, the US federal banking system is apparently susceptible to the ongoing economic weakness caused by the rampant spread of coronavirus. Earlier this month, The US Office of...
MAS’ Stress on Transaction Monitoring for Effective AML/CFT Compliance and Machine Learning is the Answer
Singapore is known for its top-notch AML/CFT regime created through up-to-date legislation, stringent policy and uncompromising supervision to safeguard against the abuse of the city state’s financi...
Singapore Fintech Festival: Tookitaki to showcase advanced machine learning solutions in financial services
Singapore is assured of the Fintech world’s unwavering attention next week, as the city state, is hosting this year’s Fintech Festival during 12-16 November. Touted as the world’s largest platfo...
