FCA review unearths weaknesses in challenger banks’ financial crime controls

A review by the FCA has declared that challenger banks must improve how they assess financial crime risk. The findings also revealed that some challenger banks were failing to adequately check their customers’ income and occupation also did not have financial crime risk assessments in place. The review, conducted over 2021, identified a rise in the number of Suspicious Activity Reports reported by challenger banks, raising concerns about the adequacy of these banks’ checks when taking on new customers.

Challenger banks aim to compete with traditional high street banks using smarter technology and more up-to-date IT systems. Many are recent entrants to the UK financial markets, with online only business models and offering financial services through smartphone apps.

The FCA’s review during 2021 found some evidence of good practice, for example innovative use of technology to identify and verify customers at speed.

The review focused on challenger banks that were relatively new to the market and offered a quick and easy application process. This included 6 challenger retail banks, which primarily consist of digital banks and covering over 8 million customers.

How Kharis and Knoble can help

A robust, consistent, and sustainable compliance systems and controls must be in place to ensure compliance on an ongoing basis as well as adapting to any changes in regulatory requirements. At Kharis & Knoble, we provide top tier risk and compliance solutions which will help you navigate the regulatory landscape in your industry.

In addition, we will do a root and branch review and help you understand your unique set of risks. Whilst providing an in-depth analysis of your risks, based on your clients, products and services, geographical location, and delivery channel. Furthermore, we will equip you with bespoke solutions, tailor-made to suite your needs and provide hands on, on the shop floor training for your people as well as equip them to solve real life problems rather than hypothetical scenarios.

By engaging Kharis & Knoble, you will understand your risks and never have to worry about regulatory changes again.

For more information on how Kharis & Knoble can help you please contact bgiwa@kharisandknoble.com

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s