We are aware that some banks are no longer offering financial services to entire categories of customers that they associate with higher money-laundering risk.
Money transmitters, charities and fintech companies are among the sectors particularly affected by banks de-risking, and we understand that some banks are also withdrawing from providing correspondent banking services. Banks have told us that this helps them comply with their legal and regulatory obligations in the UK and abroad. However, we are clear that effective money-laundering risk management need not result in wholesale de-risking.
Our anti-money laundering expectations
We require banks to put in place and maintain policies and procedures to identify, assess and manage money-laundering risk. They must be comprehensive and proportionate to the nature, scale and complexity of the bank’s activities. They should help banks identify the risk associated with different types of customers, and inform the level of customer due-diligence measures banks apply and their decisions about accepting or maintaining individual business relationships. This requires banks to use judgement and common sense, and this is what we would regard as an effective risk-based approach.
Where a bank does not believe that it can effectively manage the money-laundering risk associated with a business relationship, it should not enter into or maintain that business relationship. But the risk-based approach does not mean that banks should deal generically with whole categories of customers or potential customers. Instead, we expect banks to recognise that the risk associated with different business relationships in a single broad category varies, and to manage that risk appropriately.
While the decision to accept or maintain a business relationship is ultimately a commercial one for the bank, we think that there should be relatively few cases where it is necessary to decline business relationships solely because of anti-money laundering requirements. As a result, we now consider during our anti-money laundering requirements work whether firms’ de-risking strategies could lead to consumer protection and/or competition issues.
Further information on managing money-laundering risk
The FCA’s approach to enforcement of breaches of AML obligations is set out in our Enforcement guide.