Inside FCA Podcast: Fraud and Financial Crime

The FCA has released a podcast interview with Emad Aladhal, the director of specialists working across financial crime, financial resilience, insolvency, safeguarding and operational and technological resilience.

The podcast details the FCA’s 3-year strategy targeting financial crime which was implemented last year and touches upon the impact of such activities undermining market integrity and the confidence of consumers and market participants. Under the strategy, the Regulator intends to:

• Detect financial crime more efficiently
• Disrupt and pursue firms and individuals
• Remove FCA-regulated fraudsters from the financial system

The key deliverables under this strategy are reducing money laundering and reducing the growth of fraud. The FCA’s increasingly data-led approach allows for the focus on the effectiveness of its systems and controls so that financial crime can be detected faster. Emad describes the broad toolkit utilised by the Regulator and references ScamSmart  - which is a campaign that began in 2017, designed to increase awareness among consumers of how to avoid investment and pension scams.

Emad also alludes to the advancement of AI and how that is fuelling the growth of criminal technology. He describes using “machine learning” allowing the Regulator to identify where fraudsters are potentially advertising scams online. Social media platforms and search engines such as Google have been engaged and have introduced policies to prevent fraudsters from using these platforms to advertise scams.  In the last year alone, as many as 100,000 fraudulent websites have been removed and almost 2,000 warnings have been issued.

Stating that is the responsibility of both the public and private sectors to do their part in preventing financial crime, the rise in Authorised Push Payment or APP fraud has equated to roughly £480 million in losses in 2022.  Emad states they are working with the Payment Services Regulator to help achieve policy changes and supervisory changes where regulated firms use APP payments.

Emad describes the FCA’s expectations of firms regarding fraud prevention and urges firms to share intelligence. Firms must remain vigilant against fraudsters within the financial services industry and prevent their customers from becoming victims of scam activity. Firms must also ensure “their platforms are not used by fraudsters and that by sharing intelligence of fraudulent activity, the financial services industry can respond to the threat as a collective.

The full transcript for the podcast can viewed here.

For more information about the FCA strategy, including the work being carried out in regard to financial crime and fraud, please visit the FCA website.