Martin Cheek, who heads up the AML firm, says: “The retail banking sector has been particularly vulnerable during the pandemic due to the increase in financial crime and money laundering attempts to wash dirty money through the system.

“So, it is a cause of concern that the Financial Conduct Authority has felt the need to write to banks to remind them of their obligations under the law to ensure their anti-money laundering (AML) procedures are up to scratch.”

The FCA wrote to retail banks in May, highlighting weaknesses in financial crime controls and asked firms to complete an analysis of how they are addressing this and steps to resolve them, with a deadline of 17 September this year.

“The letter from the FCA highlighted common control weaknesses in areas including Governance and Oversight; Risk Assessments; Due Diligence; Transaction Monitoring and Suspicious Activity Reporting (SARs),” says Cheek, 

“These are all areas where the introduction of technology and automation can ensure full compliance.

“That is the message the FCA should be sending out as regulated firms in the banking sector need to make the shift from manual methods of verification to a fully automated digital solution that is more secure, more efficient and cost-saving.”