FCA report on shortcomings in how UK firms assess financial crime risk
The FCA’s latest thematic review highlights major shortcomings in how UK firms assess financial-crime risk.
Many Business-Wide Risk Assessments (BWRA) and Customer Risk Assessments (CRA) are still too generic, poorly evidenced, or disconnected from real-world controls.
Key gaps identified include:
• Risk assessments not tailored to the firm’s actual products, customers or exposure.
• Weak links between BWRA findings and monitoring/testing.
• Senior management focusing heavily on fraud while under-weighting money-laundering, sanctions, bribery and corruption.
• Governance and oversight structures that don’t translate into practical, documented risk mitigation.
• Rising enforcement risk — FCA fines hit £186.4m, with financial-crime the largest category for new investigations.
How Watchdog Services adds value:
When analysing a firm, Watchdog not only reviews governance and controls — we also search for disciplinary actions across the FCA, FOS and other sources.
Where enforcement or complaints hint at failures in risk-management, our reports flag these early, offering clients a sharper picture of a firm’s true risk profile.