FCA's upcoming FINANCIAL CRIME 5-year strategy…its all about data, technology and prosecutions

Speaking at TheCityUK National Conference in Birmingham yesterday, FCA COO Emily Shepperd delivered the FCA's upcoming 5-year strategy, which will focus on four key themes:

1. Economic growth and innovation
2. FINANCIAL CRIME
3. Consumer resilience
4. How the FCA becomes a more efficient and effective regulator

Focusing on FINANCIAL CRIME, there are a few key points of note:

• International partnerships to identify and prosecute criminals are set to expand.
• The UK's high financial crime standards will not erode, but they're open to ideas and innovation for efficient and proportional regulation.
• Data, analytics and digital tools for how the FCA regulates will continue to advance.
• Cost of compliance and innovative ways to reduce these costs are welcomed, with digital passports floated as one potential solution.

The details of Emily Shepperd's talk is as follows:-

• Financial crime - including fraud and money laundering - does enormous damage. It harms consumers and businesses, and undermines trust in our financial system.
• Our regulation plays an important role in the collective fight against it.
• In our current strategy, we set ourselves the target of slowing the growth of fraud. We have seen some positive results, but we are thinking about how we can go further. And how we can shift regulation towards a greater focus on outcomes in continued partnership with the wider national system, where we are leading or supporting on 20 of the 43 actions in the second national economic crime plan.
• Our next strategy will re-enforce partnership working, also looking internationally to achieve a further step change on the prevalence of financial crime.
• Financial crime knows no borders and so our response must reflect this.
• We are seeking partnerships to SHARE DATA where we can, to use data analytics to find connections that help to IDENTIFY AND PROSECUTE THE UNDERBELLY that operates in financial services.
• We’ve already run a proof of concept that synthesised what would have been weeks’ worth of DATA ANALYSIS into a couple of hours, resulting in the identification of criminal activity.
• The UK regulatory regime is highly regarded and only pipped from first place by Singapore.  https://www.theglobalcity.uk/PositiveWebsite/media/Research-reports/Our-global-offer-to-business-2024.pdf
• We have no intention of eroding the high standards the UK is known for.
• Financial crime not only harms consumers but is a drain on economic growth - it’s in all our interests to fight it.
• But we also hear concerns about the cost of financial crime controls - is there something we can do here?
• Perhaps digital passports are the answer? If we are able to confirm identities in a new way, can we reduce the need for some of the KYC AML checks that need to be completed when you set up a new customer?
• We are open to ideas on how we can tackle financial crime more efficiently and proportionately, while maintaining the standards necessary to protect consumers and ensure trust in the system.

Source

https://www.fca.org.uk/news/speeches/setting-foundations-our-future-strategy