The UK's financial regulatory body has expressed concern that lenders, money brokers, and leasing companies are failing to adequately address money laundering risks. The Financial Conduct Authority (FCA) issued a letter to firm leaders, giving them a six-month deadline to review and strengthen their anti-money laundering measures.
"Where firms do not take suitable steps in response to our letter, they could face regulatory action, including possible enforcement action," the FCA said.
Possible actions may entail mandating firms to enlist an external assessor to evaluate their controls. Additionally, the regulatory body may take enforcement measures, including imposing fines and revoking authorisations. The watchdog announced its focus on around 1,000 companies, including specific lenders, safe custody providers, money brokers, and financial leasing firms, whose operations are subject to supervision for compliance with anti-money laundering regulations.
A data-led review and onsite inspections of a sample of companies found financial crime controls had not kept pace with business growth, failures to assess risks from customers properly, and inadequate resourcing of oversight, the FCA said.
"We expect you to complete a gap analysis against each of the common weaknesses we have outlined within six months of receipt of this letter," the FCA told firms.