Dear CEO, it’s time to improve your financial crime controls. Now.
The FCA and PRA recently sent out their ‘Dear CEO’ letters in September, asking those in trade finance to improve their controls and take a risk sensitive approach to their control environment to try to mitigate as many risks as possible.
Regulators have been stern on this topic of late, and for good reason. Within the last year there have been several high-risk cases involving commodity traders which have resulted in both significant financial losses, and even more worryingly, scope for financial crime to take place.
What does this mean for trade finance?
Now, trade finance market participants will have to ensure that they are conducting thorough financial-crime risk assessments to strengthen their financial crime controls. This law falls under the UK AML framework, and with the Dear CEO letters issued recently, it’s within the best interest of all those affected to both listen and to act accordingly.
Current risk profiling needs to be strengthened as regulators feel systems and processes are too generic and cannot cope with new increased threats of financial crime. More specifically, regulators have highlighted that dual-use goods, sanctions, fraud, and AML in the context of financial-crime risk assessment requirements, all need to be strengthened.
Firms now need to conduct detailed assessments and risk profiling to oversee, understand, and mitigate potential financial crime
Firms should be revisiting their control frameworks considering the recent Dear CEO letter and can certainly expect non-compliance to be an area of focus for regulators in the next 12-months, and beyond.
They will be closely watching whether firms are addressing the issues raised in the letter when considering whether to bring enforcement action, and documenting additional steps taken will be important to be able to evidence compliance. What is needed unquestionably is a quick solution involving the right skills to strengthen compliance functions efficiently and effectively.
How can we help your business plan and prepare for this changing regulatory landscape?
Momenta are a global contingent resource solutions firm that has, for over 30 years, been partnering with companies in the financial services, legal, technology, and training and development sectors to cost-effectively provide the right people, with the right skills, at exactly the right time.
Momenta can, and already do for many of our clients, provide the right resource in key areas, allowing you to focus on the strategic oversight of the project at hand, while we help to implement your vision. This flexibility allows you to ensure there is always the right balance amongst your team, delivering an effective solution that will produce the desired results. We also specialise in scaling resource requirements from the ground up during the lifetime of a project to meet all key requirements, including cost control, whilst maintaining delivery capacity and capability.