Community
This summer, the FCA issued a letter to the Chair of the Treasury Select Committee, answering questions on new sanctions that have been created following the invasion of the Ukraine by Russia.
In the letter the FCA said that it will be automating its review process. In the past, it conducted on-site meetings, using face to face interviews and document and process reviews to determine how effective firms’ sanctions systems were.
In the letter, the FCA announced plans to roll out a new analytics-based tool, which tests how effective firms are at identifying sanctioned parties. The tool will use test data, generated by the FCA, of around 100,000 entities. Firms will be required to run this data through their systems, which will enable the FCA to determine how effective a firm’s systems are in detecting sanctioned companies and individuals.
This new approach will be a lot less labour intensive and produce more accurate outcomes. And it means a lot more firms will come under the microscope and can instantly determine whether a firm is meeting the required standards. So financial firms really need to ensure their sanctions systems – and processes - are up to scratch. What are the questions your firm needs to ask to find out if your systems are fit for purpose?
The FCA’s new approach means there is nowhere to hide. At the push of a button, the FCA can now prove how well your systems can accept, digest, screen and report on a substantial data set. So not only will they be interested in the results, they will also monitor the process to determine how robust and agile your system is. Things have suddenly got real with the FCA and its sanctions regime – real time, at least. And the firms that take no action, will be the ones that are left exposed.
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
Edvards Margevics Co-partner at CONCRYT
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Ellen Roberson Global Marketing Advisor, Risk, Fraud & Compliance at SAS
Patrick Bermingham CEO at Adflex
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Ben Lane VP of Colleague Experience Group at American Express UK
28 August
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