FCA: financial crime not a problem we can enforce our way out of

In an update published last week (February 8) the regulator shared the progress it has made as part of its three-year strategy to reduce and prevent financial crime. 

The FCA said its work was having an impact with losses from scams having reduced by 40 per cent at the end of 2023.

It also said more charges against individuals were made in 2023 than ever before with more expected “imminently”.

The regulator has charged 15 individuals with fraud offences who have taken in excess of £25mn from victims since April 2023. 

As part of its strategy, the FCA has invested in fraud prevention initiatives including issuing warnings about possible scams, engaging with social media influencers and their agents on what constitutes illegal financial promotion. 

As well as, working with platforms Google, Bing and Meta to tackle scam adverts and illegal financial promotions resulting in these platforms now banning paid-for adverts for UK financial services that are not approved by FCA authorised firms. 

In a blog post, Mark Francis, director of wholesale and unauthorised business investigations at the FCA said that while the financial services sector must lead the charge, other partners and sectors have a “vital role” to play too. 

Francis added: “We’ve identified four areas where we believe further collaborative effort can help shift the dial decisively on reducing and preventing financial crime.”

Our message is clear, it is up to all of us to take action to protect our consumers, our firms and our markets.Mark Francis, FCA

The areas include data and technology, collaboration, awareness and metrics. 

Francis said firms should be bolder and more collaborative in how they engage with new technologies to keep up with emerging risks such as the rise of AI and cyber-attacks.

While technology companies and social media platforms “need to do more” to clamp down on organic content promoting scams. 

According to the FCA, despite several consumer awareness campaigns, consumers are still seen as “the weak link” in the chain by fraudsters with Authorised Push Payment fraud rising in the first half of 2023.

Therefore, Francis highlighted further collective work was needed to improve consumer awareness.

The FCA also established an outcomes and metrics framework to measure the effectiveness of its financial crime work urging other firms to have “robust” metrics in place too. 

Francis said: “Fighting financial crime can seem like (and is!) a daunting mountain to climb, but we know that we’re stronger when working together, and that actually, we are making a difference. 

“Our message is clear, it is up to all of us to take action to protect our consumers, our firms and our markets. Together, we can shift the dial decisively to reduce and prevent financial crime.”

alina.khan@ft.com