FCA publishes financial crime e-money review

FCA has published its Thematic Review into money laundering and terrorist financing risks in the E-money sector. Its review covered 13 firms and focused on e-money products including prepaid cards and digital wallets, but not money remittance services or any services that fall outside FCA’s regulatory remit (such as exempt cards).

FCA found the firms had reasonably effective AML and CFT systems and controls, but urges firms not to be complacent as it did find some weaknesses.

Generally, FCA was pleased with firms’ cultures and encouraged that they had in the main revised and updated their policies and procedures to comply with the MLR 2017. It also found good levels of monitoring and governance, including where firms had outsourced distribution of e-money and compliance. It also noted that firms were concerned about wider fraud risks and non-scope services.

The report includes a summary of good and poor practices FCA observed in the course of its review.