Financial Crime World

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Understanding Financial Crime Systems Guidelines by the Financial Conduct Authority (FCA)

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This article provides an overview of the guidelines related to financial crime systems provided by the Financial Conduct Authority (FCA), specifically focusing on Section 2 (FCG 2) of their guidelines.

Overview of FCG 2

The FCA’s guidelines are divided into several sections, each providing guidance on a specific aspect of financial crime systems. The main sections covered in this article include:

  • Financial Crime Systems: Guidance on the design, implementation, maintenance, and review of financial crime systems.
  • Themes and Controls: Key themes and controls for firms to consider when implementing their financial crime systems.

Themes and Controls

This section outlines key themes and controls that a firm should consider when implementing its financial crime systems. Some of the key points include:

Governance

The FCA expects senior management to ensure that policies and procedures are appropriate and followed. This includes:

  • Ensuring that policies and procedures are up-to-date and effective.
  • Reviewing and updating policies and procedures as necessary.

Risk Assessment

A firm should identify, assess, and mitigate the risks associated with financial crime. This includes:

  • Identifying potential risks and assessing their likelihood and impact.
  • Implementing controls to mitigate identified risks.
  • Regularly reviewing and updating risk assessments.

Training

Staff should receive training tailored to their role before interacting with customers. This includes:

  • Providing training on financial crime prevention and detection.
  • Ensuring that staff understand their roles and responsibilities in preventing and detecting financial crime.
  • Regularly reviewing and updating training programs.

Oversight

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

  • Establishing an independent review process to ensure compliance with policies and procedures.
  • Providing opportunities for whistleblowers to report concerns without fear of retaliation.

Additional Guidance from Thematic Reviews (FCTR)

The FCA also provides additional guidance on governance and risk assessment through its thematic reviews (FCTR). These reviews provide insight into best practices and areas for improvement in financial crime systems.

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