The FCA fined Bastion Capital London Limited £2.45M for serious financial crime control failings in relation to cum-ex trading. Bastion had executed trading of £49bn in Danish equities and £22.5bn in Belgian equities, on behalf of its hedge fund 'Solo Group' clients. The trading had been carried out in a way that was "highly suggestive of sophisticated financial crime"1. The FCA considered that Bastion either ignored or failed to notice several "clear red flags which should have alerted them to the risk of being used for financial crime".

The statement from the FCA indicated that efficient transaction monitoring could have possibly mitigated the financial crime.

ADMISI's staggering £6.47M fine reiterated the critical importance of robust AML systems and controls2. The FCA highlighted gaps in ADMISI's AML framework that included inadequate customer risk assessments, outdated policies, and inadequate ongoing monitoring procedures. Specifically, ADMISI's business model, clientele, and dealings with Politically Exposed Persons compounded its AML risk profile. The absence of a formal process to classify customers by risk further exacerbated the firm's position.

This emphasises the necessity for comprehensive AML measures, including ongoing risk assessment, country risk evaluation, and meticulous monitoring of high-risk clients such as PEPs. It's imperative for financial institutions to align their AML protocols with international standards set forth by entities, such as the Financial Action Task Force (FATF), to mitigate the risk of financial crime and uphold the integrity of the financial system.

The £7.67M fine imposed on Guaranty Trust Bank (UK) Limited (GT Bank) by the FCA for shortcomings in its AML systems remind us of the need for robust risk assessment tools for modern banking.

GT Bank's failure to undertake adequate transaction monitoring highlights the necessity for proactive measures. Automated risk assessment tools can offer real-time monitoring capabilities and advanced analytics, enabling institutions to detect suspicious activities promptly and take appropriate action. Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA stated “Firms must protect themselves and those dealing with them from financial crime risks, especially money laundering”.

The £4,023,600 fine imposed by the FCA on Al Rayan Bank PLC serves as a reminder of the critical importance of implementing robust AML controls. Between April 2015 and November 2017, Al Rayan neglected to conduct adequate AML checks, allowing funds to flow through without proper scrutiny4.

The failure to verify customers’ Source of Wealth and Source of Funds heightened the risk of financial crime. Furthermore, the absence of comprehensive staff training on handling large deposits exacerbated the situation. Mark Steward highlighted the gravity of Al Rayan's lapses, emphasising that such failures create fertile ground for financial crime to flourish. This case reiterates the FCA's unwavering commitment to holding firms accountable for their AML responsibilities.

Incorporating the key takeaways highlighted above into the compliance process would go a long way in meeting the regulatory requirements expected from financial institutions. Advanced tools like Quin offer automated transaction monitoring, enhanced due diligence checks, and ongoing client monitoring to mitigate AML risks effectively.

Quin is an end-to-end solution that delivers comprehensive AML compliance for a streamlined client lifecycle management. Its guided workflows streamline compliance processes, ensuring coordination and clarity in AML procedures. By leveraging Quin's capabilities, financial institutions can navigate regulatory challenges with confidence and fortify their defences against financial crime.