The Financial Conduct Authority (FCA) has published the results of its first industry-wide survey of the financial crime activity being undertaken by firms. More than 2,000 firms were canvassed, including all the UK’s banks and building societies.

Some firms are subject to the detailed financial crime rules in the FCA Handbook, but while many firms are not, such as those in the consumer credit sector, all authorised firms need to have appropriate systems & controls to mitigate the risk that they could be used to facilitate financial crime.

All of the data in the report comes from larger firms who are subject to the detailed rules.

Collectively, the firms reported 548,678,586 customer relationships, of which 427,812,266 (around 78%) were in the United Kingdom.

The 2,000 or so firms reported they had a total of 119,562 ‘politically exposed persons’ as customers – these are people with prominent public jobs who may be in a position to abuse their role for private gain. 1,596,539 other customers were described as being ‘high risk’ for money laundering purposes for some reason.

As for what firms are doing to tackle the risks of financial crime, the firms said they collectively employed 11,500 full-time equivalent staff in financial crime roles. The FCA adds that it believes the industry spends more than £650 million per annum on the fight against this form of crime.

Employees of the firms made 922,544 Suspicious Activity Reports to their internal Money Laundering Reporting Officer during 2017. Of these, more than a third (363,135) were then reported to the National Crime Agency.

1,150,000 prospective new customers were turned away by the firms over financial crime concerns, and the firms also refused to carry out further business with 375,000 individuals.

The issues firms said were of greatest concern were:

  • 1st Identity fraud and identity theft
  • 2nd Phishing attacks
  • 3rd Computer hacks
  • 4th Malware
  • 5th Application fraud

However, firms said that they believed the following resulted in the greatest number of victims:

  • 1st Pension liberation fraud
  • 2nd Account takeover
  • 3rd Debit card fraud
  • 4th Advance fee fraud
  • 5th Identity fraud and identity theft

The issues where firms believed the risks were increasing fastest were:

  • 1st Vishing (voice phishing attacks)
  • 2nd Malware
  • 3rd Phishing
  • 4th Computer hacks
  • 5th Account takeover

The countries perceived by the firms to pose the greatest financial crime risk were:

  • 1st Iran
  • 2nd Panama
  • 3rd Russia
  • 4th Iraq
  • 5th Laos

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article