FCA has completed its first financial crime survey. It intends to carry out the survey annually, using the Financial Crime Return. Over 2,000 firms were required to file the return, and FCA looked to establish:
- the number of customers that pose a higher risk of financial crime: Firms identified 120,000 PEPs and 11,000 non-EEA correspondent banking relationships amongst their client base, and noted 1.6m other high risk customers. Overall, this was well under 1% of all customer relationships;
- what the industry is doing to tackle financial crime: the survey showed that firms employ 11,500 full time equivalent staff in financial crime prevention roles and spend well over the quantified £650m on them. Turning to reporting, there were 923,000 internal SARs, just over one third of which were reported to the NCA. There were just over 2,100 terrorism-related SARs. Firms also reported that of the 858,000 relationships with introducers, fewer than 1,000 were exited for financial crime reasons. Firms refused to provide services to 1.15m prospective customers and turned away 375,000 existing customers because of financial crime concerns;
- industry views on fraud risks: fraud and ID theft, and phishing are considered to be the most prevalent frauds, and generally cybercrime is top of firms’ lists . Firms also thought fraud was growing; and
- firms’ views on country risks. Firms were asked to disclose which jurisdictions they had assessed and considered high risk for financial crime purposes. The top 10 were Iran, Panama, Russia, Iraq, Laos, Afghanistan, Lebanon, Libya, Nigeria and Syria.
Firms within the survey had 549 million customer relationships, 78% of which were in the UK and a further 21% elsewhere in Europe.