Navigating the FCA's latest review

Enhancing financial crime response in the age of evolving fraud.

The FCA’s recent (and catchily titled) “Review of Anti-Fraud Controls and complaint handling in firms (with a focus on APP Fraud)” has taken a look at how payment service providers are tackling the current fraud epidemic.

It’s not news that the FCA expect firms to keep their financial crime controls under regular review. Risk and control reviews have been fundamental in their requirements for many years, and in the rapidly evolving fraud world we live in, it’s more important than ever.

Surprisingly, some of the FCA’s key findings from this latest review involve firms whose fraud responses don’t focus on customers. The review found firms focussing on commercial risk rather than customer outcomes; room for improvement in the support firms give to victims of fraud; and a variety of poor complaint handling processes involving victims.

The theme is echoed in firms’ MI as the review also found firms reporting against financial measures rather than customer focussed metrics.

Whilst it’s natural that firms will be at different stages with developing and embedding their financial crime prevention frameworks, it’s encouraging to read the FCA taking a positive view of firms who are combining new technologies such as device monitoring and biometric analytics with more established controls such as customer and transaction monitoring. It’s also positive that intelligence sharing is helping many firms to keep ahead of (or at least up to date with) changing fraud threats.

As ever, there is work to do. Both this review and the FCA’s recent communication on Detecting and Preventing Money Mules are full of useful information about keeping up the fight against financial crime.

However, my key takeaway from this latest review is the importance of your firm's Compliance, Conduct, Complaints and Financial Crime experts collaborating to share their collective knowledge and experience to continually review and optimise your response to financial crime.

Claire Rees, Client Manager at Jade ThirdEye  – Claire has over 21 year's experience working in Risk Management roles in financial services.

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