On 2 August, the FCA published its report on 'new technologies and anti-money laundering compliance '. The report is intended to increase the FCA's understanding of emerging technologies and their potential application to anti-money laundering (AML).
What does the report cover?
The report looks at the role of technology in the 'AML compliance landscape’ from the perspective of those in the financial industry as well as considering the regulatory, economic and operational challenges faced by the technology providers. In particular, the report sets out the views of respondents on the following topics:
- What are the key functions of new and emerging technologies related to anti-money laundering compliance, and how can they aid compliance activities?
- What challenges do firms face in introducing new technologies?
- What good practice examples and lessons are available for firms considering new compliance technologies?
- What steps could the FCA take to encourage more innovation in anti-money laundering compliance?
As part of its research, the FCA interviewed 42 parties comprising of a mixture of regulated firms, technology firms and other bodies, such as think tanks and academics. Care was taken to ensure that the FCA interviewed a representative balance of different parties and responses were sought from businesses of different sizes, areas of practice and technologies in use.
Who should read the report?
The report is part of the FCA's initiative to encourage innovation within the financial industry and promote UK Fintech. The publication of the report is also timely, as firms update their AML policies to comply with the new Money Laundering Regulations 2017.
The report will be of interest to firms who use, or are considering using, new technologies to assist with their AML efforts, as well as to regtech firms and technology providers operating in the area we highlighted in part following our trip to Money20/20 in Copenhagen.
The full report can be found on the FCA's website.