Financial Crime World

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Financial Crime Systems and Governance

Themes and Controls

When it comes to preventing, detecting, and responding to financial crime, firms must have effective systems in place. This includes governance structures that ensure policies and procedures are appropriate and followed.

Key Points

  • Firms must have effective systems in place to prevent, detect, and respond to financial crime.
  • Senior management is responsible for ensuring that policies and procedures are appropriate and followed.

Staff Recruitment, Vetting, Training, Awareness, and Remuneration

When it comes to staff, firms should ensure they receive the necessary training and support to help them identify and prevent financial crime. This includes:

New Staff

  • Should receive financial crime training tailored to their role before interacting with customers.
  • Training should have a strong practical dimension (e.g., case studies) and some form of testing.

Whistleblowing Procedures

  • Should be clear and accessible, respecting staff confidentiality.

Quality of Oversight

A firm’s efforts to combat financial crime should be subject to challenge by senior management. This includes:

Regular Review

  • A firm’s defenses against financial crime should be routinely tested by internal audit and compliance teams.

Further Guidance and Controls

The Financial Conduct Authority (FCA) provides additional guidance on governance and risk assessment through FCTR, including:

Governance

  • The FSA’s thematic reviews provide guidance on governance, including senior management responsibility and the importance of a strong corporate culture.
  • Senior management is responsible for ensuring that policies and procedures are appropriate and followed.

Risk Assessment

  • Guidance on risk assessment, including assessing high-risk customers and PEPs, and responding to significant bribery and corruption events.

Key Takeaways

Some key takeaways from this summary include:

  • Financial crime systems should be effective in preventing, detecting, and responding to financial crime.
  • Senior management is responsible for ensuring that policies and procedures are appropriate and followed.
  • Staff training should be tailored to their role and have a strong practical dimension.
  • Whistleblowing procedures should be clear and accessible.
  • Internal audit and compliance teams should routinely test the firm’s defenses against financial crime.
  • Governance and risk assessment are critical components of a firm’s approach to financial crime.