Effectiveness of the AML regime in disrupting financial crime

Opening comments by Rob Gruppetta, Head of the Financial Crime Department at the FCA, for a panel discussion at our Financial Crime Conference.

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Watch the video from the panel discussion

Speaker: Rob Gruppetta, Head of the Financial Crime Department
Event: FCA Financial Crime Conference, London
Delivered: 10 November 2016
Note: this is the speech as drafted and may differ from delivered version


Some of you might have seen or read our Executive Director, Megan Butler’s speech at the BBA’s financial crime conference on effectiveness and a key theme of that, and also of today, is the importance of working together across the industry and public sector to achieve that closer dialogue and information sharing.

It’s also important to work with our international colleagues – AML is a global issue, not just a domestic one.

I’d like to start off by welcoming our panellists today and thanking them for taking the time to be on what I know will be an interesting panel.

  • Giles Thompson is Deputy Director of the team in the Treasury responsible for Sanctions and Illicit Finance policy – his team will transpose the Fourth Money Laundering Directive into the UK Regulations and they represent the UK at the Financial Action Task Force (FATF) level.
  • Donald Toon brings a law enforcement perspective as Director of the Economic Crime Command, the part of the National Crime Agency which looks at the financing of serious and organised crime and the impact that has on the UK economy.
  • John Cusack and Lord Evans both bring an industry perspective; John is currently MLRO at Standard Chartered Bank and has a wealth of experience in industry, as well playing a key role at the Wolfsberg Group. Lord Evans is now a non-executive Director of HSBC Holdings and prior to that was Head of MI5.
  • Mark Steward is the FCA’s Director of Enforcement.

So I’m sure you’ll agree we have an excellent range of experience and viewpoints on today’s panel.

The social and economic costs of serious and organised crime to the UK were assessed in the past at £24bn. We are all in this room because we spend a significant proportion of our time trying to prevent some of that crime, trying to create effective systems which detect it, to spot it soon enough that we disrupt it, or to train our staff and educate consumers and help them notice unusual activity and encourage them to report it.

So we are here today to ask: how can these controls be the best they can be? The most effective? And what are we doing that is ineffective? What could we stop doing?

There’s a delicate balance between deterring criminals and terrorist organisations but also being proportionate, risk-based and fair to legitimate businesses. We know that the regime can be a burden sometimes, and I hope you have taken away the message from today that we do not want a future where procedural compliance costs undermine efforts to tackle real financial crime.

At the FCA, we want the regime to be as effective as possible as much as any of you, and we’re continually looking at ways to achieve that. We focus on the firms which pose the greatest risk, and, as I mentioned this morning, we are introducing a Financial Crime Data Return to really help us do that.

We have a tiered approach to supervision – the major retail and investment banks are subject to our Systematic Anti-Money Laundering Programme (SAMLP), a deep-dive assessment of their controls, and smaller firms with inherent levels of money laundering risk within their business models receive two to four day visits from our specialist supervision teams.

We also carry out thematic work and take action in response to crystallised risks, where it meets our threshold.

In some cases we take enforcement action, but we use the full range of our supervisory tools to help us ensure firms take steps to mitigate financial crime risk in a sound yet proportionate way. That’s what effectiveness means to us.

But it’s a joint effort – what does effectiveness mean for the government, for law enforcement and for industry? I’ll be interested to hear from a variety of different perspectives today.

As with this morning, we will be taking questions throughout the panel from both the floor and the text service and the panel is being filmed, which includes the Q&A parts.