Remote working ‘increasing risk of financial crime’
Remote working is creating further risks of illegal activity not being spotted, an anti-money laundering software provider has warned.
Encompass Corporation said financial crime is a major challenge that is buoyed by remote and online working.
All regulated firms, including peer-to-peer lenders, have to do anti-money laundering (AML) checks on their customers and must report any suspicious activity.
“For the majority of financial services firms, managing complex know your customer and AML programmes can be a hugely challenging task, costing time and resources, Wayne Johnson, chief executive of Encompass Corporation, said.
Read more: Additional P2P regulation predicted
It comes as analysis of suspicious activity reports (SARs) submitted by financial firms to the Financial Conduct Authority (FCA) by thinktank Parliament Street shows staff members are becoming more aware of illicit transactions.
The data shows that the number of SARs has risen from 887,500 in the 2017 to 2018 financial year to 934,136 in 2018 to 2019 and 1,02m in 2019.2020.
Retail banking contributed to more than 78 per cent of the SARs at 804,105, followed by retail lending with 204,374 reports.
It comes after the FCA last month reminded financial services firms, including P2P lenders, of their regulatory responsibilities as more staff work from home.
The FCA said firms must inform it of any material changes in the way they operate and compliance and record keeping must continue even when staff are working remotely.
Businesses need to be able to prove that the lack of a centralised location or remote working does not or is unlikely to affect their ability to conduct regulated activities and prevent the FCA and consumers from contacting them.
Flexible working also must not cause detriment to consumers, reduce competition or increase the risk of financial crime, the FCA said.
Read more: FCA implementing blockchain to quicken compliance checks