Between November 7 and 11 2016 the Financial Conduct Authority (FCA) hosted its Financial Crime Conference in London. The event saw interested individuals and entities, such as money laundering reporting officers and compliance officers, convene to discuss the ongoing fight against financial crime.
Chief executive Andrew Bailey delivered the opening speech of the conference, stating his disappointment that the financial services industry found itself in the throes of a "misconduct crisis". In his speech, Bailey committed the FCA to continuing the fight against financial crime, while warning that he could never "promise to beat it entirely". The speech highlighted three key challenges faced by those seeking to combat financial crime:
- technological innovation in financial services;
- a reliance on rule making; and
- the difficulty that multinational entities face in ensuring uniform, worldwide compliance with internal global policies related to financial conduct.
As part of effectively meeting these challenges, Bailey stated that a shift in social attitudes to financial conduct regulations, whereby "everyone knows the rules of the game, and then everyone sticks to them", is essential – as is the more meaningful and effective use of technology.
While directly applicable to entities regulated by the FCA, these messages have relevance to many corporates. The use of technology must be carefully monitored in any organisation to ensure that it does not represent the easiest avenue of attack for criminals. However, if used innovatively, technology can be a powerful tool in ensuring that a workforce is properly trained in, and compliant with, a firm's policies and procedures. Such training is meaningless if it does not impart an understanding of the purpose behind rules and regulations; firms must teach their employees to look at the substance of conduct, in addition to such strictures. To ensure global compliance with policies and procedures, organisations should train local managers more directly and in a manner that respects and understands the cultures in which they operate, to ensure that any territory-specific risks are adequately addressed.
For further information on this topic please contact Kathleen Harris, Sean Curran, Stuart Baker or Oliver Cooke at Arnold & Porter Kaye Scholer LLP by telephone (+44 20 7786 6100) or email ([email protected], [email protected], [email protected] or [email protected]). The Arnold & Porter Kaye Scholer LLP website can be accessed at www.apks.com.