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Skilled Person Report relating to the financial crime systems and controls of a UK-based eMoney firm

The firm was a relatively newly established Electronic Money Institution. Through an initial desk-top review and correspondence with the firm, the regulator had concerns over the adequacy of aspects of the firm’s Financial Crime Framework. This included whether the risk assessment and subsequent customer due diligence were commensurate to the potential money laundering risks. The regulator required a two stage Skilled Person review, the first stage focused on identification of the extent of any Financial Crime framework weaknesses.

We assembled a team based on the specific nature of the regulator concern. This team included several senior staff with extensive experience of areas such as:
– Financial Crime (in particular Money Laundering) regulatory requirements;
– Financial Crime systems and controls; and
– payment services and eMoney (including Crypto).

We adopted a strictly evidence-based approach to the assessment including document review; interviews with key officers, managers and staff; live observation of Board and governance committee meetings; operational process walkthroughs; and sample testing of due diligence on customers. Given the dynamic nature of the firm and that they were in progress with a series of Financial Crime framework improvements (based on a previously commissioned review and the FCA letter) we worked closely with the firm to understand relative areas of progress.

Our work focused on areas including governance; roles and responsibilities; skills and capabilities; policies and procedures; risk assessment; compliance monitoring; due diligence processes; screening processes; and training and awareness. We triangulated the results of these various sources of evidence to arrive at robust conclusions supported by clear evidence.

Our review identified a number of key areas of enhancement that the firm needed to make in order to fulfil the regulatory standards. The report and the resulting recommendations allowed the firm to develop a comprehensive, practical and fit for purpose remediation plan that, implemented robustly, would enable it to enhance the overall Financial Crime Framework.

Joel Osborne

Joel Osborne

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