Financial crime enhancement for retail bank with high customer volumes – multistage Skilled Person
A UK retail and corporate banking subsidiary of an international bank was subject to an FCA Skilled Person review and Voluntary Requirement restrictions on the firm. We were selected as the Skilled Person.
Given the high customer volumes and, at the time of the commencement of the review, a blend of computer and paper-based files, the Firm knew that remediation activities would involve extensive work on their behalf. This process was to be further complicated as it commenced during the first lockdown of the COVID-19 pandemic in 2020.
In the initial review, we adopted an evidence-based approach including document review; interviews with key stakeholders; live observation of Board and governance committee meetings; operational process walkthroughs; and sample testing of due diligence. We triangulated the results of these various sources of evidence to arrive at robust conclusions supported by clear evidence. Much of this work had to be done on a hybrid basis.
The output of the review was that they needed to undergo an extensive programme of remediation including enhancements to Governance and Oversight, CRA, Onboarding (CDD, EDD), Sanctions and TM. There was also a need to enhance their customer files. This had to be undertaken by the Firm across the various tranches of their 20,000+ client base.
Throughout the review and remediation, we worked alongside the Firm and the FCA in order ensure the Firm achieved a fit for purpose standard including provision of value-add observations on an ongoing basis. During this time we worked closely with the senior management, board and regulatory teams.
With other issues that arose for the Firm during this time, the period between the initial review and the final review covered a period of 4 years. We maintained a light touch presence at key points so as to not overburden the Firm with unnecessary costs.
The Firm achieved the remediation of the various recommendations.
When we came to the Final review the parent had decided to invoke the Firms Solvent Wind-Down plan for strategic reasons. Hence our role became one of evaluating the completion of remediation activities to the extent they were proportional to the Bank’s status and its current/ongoing status. This included evaluation of their FC controls in place relating to the offboarding of customers and the transitioning of unclaimed funds into a trust or equivalent.
