Banking & payments
Banks, e-money institutions and payment service providers sit at the front line of the UK financial-crime perimeter and are held to the highest supervisory standard under the MLR 2017, the FCA Financial Crime Guide and the JMLSG Guidance.
Where the regime bites
The FCA supervises credit institutions, e-money institutions authorised under the EMRs 2011, and payment institutions authorised under the PSRs 2017. All are 'relevant persons' under Regulation 8 of the MLR 2017 and must maintain the full suite of policies, controls and procedures required by Regulations 18 to 21.
Sector expectations are anchored in the FCA Financial Crime Guide (FCG), the Financial Crime Thematic Reviews and the Dear CEO letters issued to challenger banks, EMIs and payments firms since 2020. The JMLSG Guidance (Parts I, II and III) is HM Treasury approved and provides the working interpretation of the Regulations for the sector.
What supervisors expect
Board-approved AML/CTF policy, an SMF17 (MLRO) or equivalent nominated officer, and a nominated board member with responsibility for compliance with the Regulations.
Documented, six-factor risk assessment with a defensible methodology, refreshed on a trigger-and-cycle basis and mapped to the UK National Risk Assessment.
Risk-based CDD, EDD for high-risk relationships, PEP screening, source of funds and source of wealth for private banking and correspondent relationships.
Calibrated automated monitoring with documented scenario coverage, SAR quality assurance, DAML strategy and Regulation 40 record-keeping.
Recurring risk indicators
- Correspondent banking and nested payment arrangements
- Cross-border wire and e-money flows to higher-risk jurisdictions
- Rapid customer onboarding and mule account typologies
- APP fraud, romance fraud and investment fraud proceeds
- Sanctions evasion through layered payment chains
Advisory support for the sector
- Section 166 skilled-person support
- Financial crime target operating model review
- Transaction monitoring calibration and tuning
- MLRO retainer and deputy MLRO cover