Emma Hagan

🚨  FCA fines Starling Bank £29M for Major Sanctions Failures 🚨 The FCA has fined Starling Bank £28,959,426 for serious failures in its financial crime controls, notably around sanctions compliance and onboarding high-risk customers during a voluntary requirement. 🔍 Key Issues: 1️⃣ Starling failed to stop onboarding 49,183 high-risk customers despite a VREQ (Voluntary Requirement) imposed in 2021 to prevent this. This comes on the heels of a similar fine against Coinbase earlier this year. 2️⃣ Sanctions Screening Failure: Between 2017 and 2023, Starling’s automated system only screened customers against a fraction of the required sanctions lists, posing a significant risk of enabling financial crime. One Designated Person managed to open an account as a result. The FCA labelled the bank's sanctions controls as "shockingly lax," with systems that screened customers just once every 14 days. 3️⃣ Risk Assessment Weakness: Starling’s firm-wide risk assessment failed to appropriately assess its sanctions risk. They rated the risk as low, not considering key high-risk factors such as payments from crypto-related platforms and multi-currency accounts. ⚖️ Fine Breakdown: 💹 £1M of the fine relates to onboarding high-risk customers. 💹 £28M is tied to severe sanctions screening failures, which the FCA deemed a breach of Principle 3, which requires a firm to take reasonable steps to ensure that it has organised its affairs responsibly and effectively, with adequate risk management systems. 📚 A must-read for compliance officers and financial crime professionals! #FinancialCrime #Sanctions #AML #Compliance #StarlingBank #FCAPenalty 🔗 Full FCA notice: https://lnkd.in/ewyw-5Dc

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MONEYVAL's recent assessment of Guernsey's international AML/CFT/CPS standards underscores the continued focus on financial crime in the region. While results are pending, Ocorian’s Joe French and Bovill Newgate’s Barney Lewis explain how firms can ensure their strategies remain effective against evolving risks: https://lnkd.in/epuaDKMY #AML #FinancialCrime #FinancialRegulation

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🕵️‍♂️ New fraud rules coming into force today have been condemned for failing to make banks report fraud to UK law enforcement agencies, writes Ellesheva Kissin. ⚠️ The controversial rules, which require all payment providers to reimburse victims of authorised push payment fraud, are a missed opportunity to compel banks to provide intelligence to agencies with the power to prosecute, say leading industry players. 📢 The issue was aired at a Labour party conference fringe meeting last month, at which politicians were grilled on how the new rules would work. 🔍 “All fraud is going to go dark…If there’s no intelligence, are we not actually just making it much easier for them?” asked one participant, who did not give their name. They warned that law enforcement agencies were deeply critical of the rules. 📉 Fraud is already significantly underreported. Law enforcement figures currently estimate that only 14 per cent of frauds are reported to them, according to Kathryn Westmore, a senior research fellow at the Centre for Finance and Security (CFS) at RUSI. 🚨 A prominent law enforcement official, who did not wish to be named, agreed the rules are “a problem” for failing to loop in the police. 📋 “Many from law enforcement circles would probably prefer to mandate reporting to police before reimbursement, just like you’d have to have a crime number if burgled before reporting to your insurance company,” the official said. 👀 Read more below https://lnkd.in/dhdgNqwe #APPfraud #fraud #APP

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The three stages of laundering money are: 1. Placement: The ""dirty money"" or proceeds of crime is placed in the financial system; 2. Layering: Moving funds around financial services, with a view to further disguising the proceeds of crime; and 3. Integration: When the money launderers can withdraw the funds from the financial system and use this for seemingly ""legitimate"" activities. Click below for our online Anti-Money Laundering training course, with access to our Free Demo Course.... #AML #AntiMoneyLaundering #RQCGroup

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On October 17, the Financial Conduct Authority (FCA) expressed its support for the government's consultation on the regulation of Buy Now Pay Later (BNPL) products, which are currently exempt from regulation. Key Highlights: - Call for Regulation: The FCA has been advocating for BNPL regulation since 2021, following the Woolard Review, to ensure consumer protection and address potential risks in the sector. - Upcoming Consultation: The FCA plans to consult on its regulatory regime for BNPL after legislation is finalized, outlining proposed rules and an approach to authorising firms. - Consumer Protection: New rules will require BNPL providers to offer clear information, conduct affordability checks, and comply with the Consumer Duty. Borrowers will also have access to the Financial Ombudsman Service. - Authorisation Process: Firms offering BNPL services will need to apply for authorisation. A Temporary Permissions Regime (TPR) will allow firms to continue operating while their applications are processed, ensuring compliance with FCA rules. - Proactive Measures: Although not yet regulated, the FCA has already taken steps to address unfair contract terms and misleading advertising in the BNPL sector. The FCA’s regulation will ensure BNPL remains a useful option for consumers while protecting borrowers and fostering responsible lending practices. Follow Global Regulatory Insights for more updates on financial regulations. #FCA #BNPL #consumerprotection #creditproducts #regulation #UK #GRI

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🔍 Amid the recent sound and fury over timelines and thresholds of reimbursing victims of authorised push payment fraud, the most significant issue around is being overlooked: preventing the scam in the first place, writes Nicky Goulimis of Tunic Pay. 💡 The debate sparked by the UK regulator’s decision to slash maximum fraud reimbursements from £415,000 to £85,000 represents an opportunity, I believe, to align incentives to reduce losses with an improved customer experience. 💸 What has been under-reported is that banks and fintechs will still have to pay a not-insignificant bill. Research by the Payment Systems Regulator has found that the lower threshold will still cover more than 99 per cent of APP fraud cases by volume, and the remainder of cases will simply be redirected to the Financial Ombudsman Service for further remediation. 🤝 Rather than finger-pointing, the UK sector should focus on how information sharing can benefit both the industry and consumers, reducing fraud likelihood. Read more https://lnkd.in/emGQxQZH #APPFraud #AuthorisedPushPayments #Banking

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With less than 1 month to go until the new regulations go live it is important for firms to take measures to mitigate risk and safeguard their future. #SD20 #FinCrime #InsurTech #APPFraud #RegTech #DigitalFraud

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The ISO 20022 deadline for CHAPS has moved from Nov 24 to May 25... or has it?   It’s worth noting that Bank of England have made it very clear that they will not move the deadline beyond this point!  The Bank of England will expect banks, and their customers to work towards the deadline as if it was still the end of November. The May deadline is just a buffer for those businesses who aren’t ready. In the latest episode of our “Mastering ISO 20022” series, I discuss the updated deadline, and specifically the fact that even this extended timeline still requires banks and corporates to move quickly to prepare.  

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Fintechs and banks have blasted a UK regulator’s handling of new incoming fraud rules, warning they will sow “chaos” and slow down instant payments. The Payment Systems Regulator will force banks and payment companies to reimburse fraud victims up to £415,000 from October 7, with costs shared between both the sending and receiving banks. The new rules aim to tackle authorised push payments fraud, an increasingly sophisticated financial crime that tricks victims into sending funds directly to fraudsters’ accounts. According to UK Finance’s Annual Fraud Report, APP fraud cases jumped 12 per cent to 232,429 in 2023. But Pay.UK, the interbank operator building the claims management system most of the industry will have to use, will likely not have it ready by the go-live date, four industry sources tell Banking Risk and Regulation. Story by Ellesheva Kissin. Read more below👇 https://lnkd.in/eKwgaj3y #banking #fraud #APPfraud

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🔍 NEW BLOG | Money laundering in the UK Our Head of Investigations Tony McClements says that an increase in money laundering cases indicates that the UK is finally getting to grips with money laundering as an indictment. Read his latest analysis in GRIP ⬇️⬇️ https://lnkd.in/eMgrdM7g #fraud #moneylaundering #prosecutions

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The FCA Practitioner Panel has published its response to the FCA's Call for information (CfI) on big tech and digital wallets, noting: 👉That digital wallets are becoming a critical part of payments infrastructure 👉The implications of the prevalence of big tech 🧐 The need for the regulator to provide consumers with appropriate understanding, protection, and choice 👉Clarification of proper apportionment of responsibility when things go wrong between digital wallet providers and individual payment providers would be welcome Access the full response here - https://pimfa.cc/bljaL #digitalwallet #regulation #technology

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Financial Conduct Authority Confirms Anti-Greenwashing Guidance and Proposes Extending Sustainability Framework Sacha Sadan, Director of Environmental, Social and Governance, FCA, said: “Confirming the new anti-greenwashing guidance and our proposals to extend the Sustainability Disclosure Requirements and investment labels regime are important milestones that maintain the UK’s place at the forefront of sustainable investment. Our good and poor practice anti-greenwashing examples will help firms market their products in the right way. We continue to work closely with the ASA and CMA to address greenwashing. “Consumers care about investing in products that have a positive impact on the planet and people. That’s why we want to boost the integrity of the market and ensure people can make informed decisions about how to invest their money.” https://lnkd.in/efFqsgrR #fintech #finance #banking #paytech #payments #fintechnews #paymentsnews

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The FCA has fined CB Payments Ltd over £3.5 million pursuant to regulation 51(1)(a) of the Electronic Money Regulations 2011 in relation to financial crime controls. This is the first time that the FCA has taken enforcement action using these powers. In this article, partner David Capps and the team consider the decision and its possible implications for firms, including banks, payment services institutions, E-money institutions and cryptoasset firms. Read the full piece by clicking below. #DisputeResolution #Regulatory

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Can your bank tackle cross-channel scams? Cross-channel scams happen when criminals steal information from a variety of touch points to take control of a victim’s bank account, according to Featurespace’s Head of Analytic Products, Edmund Kay. This could include cloning a payment card in a customer’s name or steal someone’s identity to set up a bank account or take out a loan. Read Ed's full article here: https://lnkd.in/e3W9YX39

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🚨 Starling Bank Fined £29M by the FCA for Serious Failures in Financial Crime Controls The Financial Conduct Authority ("FCA") has fined Starling Bank £28.96 million for significant lapses in its financial crime controls. This penalty underscores the regulator's zero-tolerance stance on weak anti-financial crime measures. The breakdown of the fine reveals two key areas of failure: ❌ £1 million was levied for Starling's failure to stop onboarding high-risk customers, even after a regulatory requirement was placed on them to cease such practices. ❌ £28 million was fined for what the FCA described as "shockingly lax" financial sanctions screening systems. 👉 In an environment where regulatory scrutiny is intensifying, particularly around sanctions compliance, this is a reminder to all financial institutions that effective controls are not optional—they are essential. Need help strengthening your financial crime compliance and ensuring your sanction controls are up to par? Contact Novatus for expert guidance: https://lnkd.in/eGa4y3Uc Read the FCA's Final Notice here: https://lnkd.in/emPDm8XP #FinancialCrime #FCA #Compliance #AntiMoneyLaundering #RiskManagement #SanctionsCompliance #RegulatoryCompliance #ConsumerProtection

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This week in banking news – banks to delay payments up to three days to investigate fraud, Visa Direct and APA partner, and Janet Yellen cautions against private credit risk The UK Treasury will empower banks to delay payments by up to 72 hours to investigate suspected fraud. While the increased fraud protection could increase confidence in the UK payment system, it is also likely to disrupt the speed of business transactions, especially for companies relying on rapid payments to maintain cash flow and meet supplier obligations. The impact of these cash flow challenges will be borne largely by SMEs. While SMEs deal with the added pressure of possible delayed cash inflows, what returns will the banks be making on their additional cash holdings, in the name of fraud protection? In other banking news: Global - Janet Yellen has called for increased regulatory vigilance over the growing systemic risks posed by private credit and non-bank lenders.   United Kingdom - Bank of America expands its Virtual Payables capabilities in EMEA with the launch of Virtual Payables Direct. Australia - Westpac has sold its remaining auto finance division to non-bank lender Resimac. - APRA has revoked the licenses of International Bank of Australia and its parent company upon request. Singapore - ANZ joins the MAS-led initiative to explore the use of tokenised real-world assets in financial markets. - Atlantic Partners Asia partners with Visa Direct to handle higher trade sizes and offer global payment services. United States - Apollo Global Management sets a goal to more than double its assets under management to $1.5 trillion by 2029, positioning itself to compete directly with banks. - Wells Fargo and Fiserv will terminate their long-standing merchant acquiring joint venture in 2024. #bankingnews #marketintelligence #financialservices #globaltrends Want to start your week with the intelligence behind leading decision-makers? Read the full stories and subscribe to East’s banking news in the comments below

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