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The FCA publishes an analysis of firms’ 2017-2020 financial crime reporting data

Oct 8, 2021 | FCA

Link(s):Financial Crime: analysis of firms’ 2017-2020 REP-CRIM data | FCA

Context

This publication provides analysis of the REP-CRIM submissions for the three reporting periods between 2017-2020. For these periods the FCA received a total of 5,685 REP-CRIM submissions from over 2,300 different firms. This analysis aims to provide Money Laundering Reporting Officers and industry practitioners insights on trends and developments, which should help inform the arrangements and risks of their respective firms.

Key points to note

  • Firms reported approximately 89,000 Politically Exposed Persons as customers in 2019/20 and 2018/2019, a substantial decrease from approximately 111,000 PEP customers in 2017/18, in part attributed to the amendment of our guidance in 2017 to exclude the reporting of certain domestic customers as PEPs.
  • Retail banking firms have reported approximately 390,000 high risk customers in 2019/2020 which is almost half the high-risk customers reported by all firms (far exceeding firms from other sectors). This is reflective of the sector’s business models which increase their exposure and vulnerability to being used for the purposes of money laundering, as reflected in the National Risk Assessment 2020 [see paragraph 3.3].
  • The number of Suspicious Activity Reports reported to the National Crime Agency (NCA) has increased, from 394,048 in 2017/2018 to 480,202 in 2019/2020 (c.22% increase) [see paragraph 3.4].
  • The number of firms reporting automated sanctions screening is increasing year on year, with a 16.5% increase over these 3 reporting periods. However, the investment management sector has the highest number of firms that do not use automatic screening [see paragraph 3.5].
  • For the year 2019/20, firms which submitted the REP-CRIM collectively employed approximately 17,000 full-time equivalent staff in financial crime roles, this compares to approximately 15,700 in 2017/2018 [see paragraph 3.8].
  • A total of 761,437 customers were ‘exited’ during the 2019/20 reporting period, which has more than doubled in the last 3 years. This was about 0.16% of total customers across all submissions that year. Retail lending and retail banking sectors have exited the most customers for each of those years [see paragraph 3.9].

Next actions

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