The British regulator asks establishments to act more once morest the risks of “circumvention of sanctions”, “money laundering and financing of terrorism”.
Some neobanks are showing “weakness” in controlling financial crime, a British regulator pointed out on Friday. The latter called on these establishments to do more once morest the risks of “circumvention of sanctions”, “money laundering and financing of terrorism”.
These establishments which most often offer their services only online “represent an important part of the retail banking offer in the United Kingdom, but there is no compromise between quick and easy account opening and rigorous controls for crime. financial”, summarizes Sarah Pritchard, market director of the British market regulation agency (FCA). London is regularly accused by anti-corruption NGOs of not doing enough to fight financial crime, and in particular money laundering.
The UK Markets Constable relies on a study he conducted in 2021 which “identified an increase in suspicious activity reported” by neobanks, according to a statement, “raising concerns regarding the adequacy checks on these banks when they accept new customers”. “Some do not properly verify the income and profession of their clients” and others do not even “have financial crime risk assessments in place”, continues the press release.
The study was conducted “before the significant extension of sanctions once morest Russia in recent months” but the remarks “also apply” to the checks on the risks of circumvention of these measures, according to the regulator. On the other hand, the FCA notes that “the innovative use of technology to quickly identify and verify customers”, is to the credit of these new establishments.
The term “neobank” covers an archipelago as vast as it is heterogeneous of new generation banking players, often coming from digital and determined to reinvent the use of banking. The neobanks Monzo, Starling or Atom Bank, are among the establishments registered as banks in the United Kingdom, but the FCA refused on Friday to reveal which institutions had been reviewed in the study.
The regulator merely says that it has studied six retail banks, mainly online banks which together have more than 8 million customers, many of whom have recently entered the UK market. On the other hand, “fintech” providing payment services without being registered as banks, such as Monese or Revolut, were not taken into account.
