Daily Dash: FCA Drops Criminal Investigation Into AML Failures At Monzo

June 5, 2024
Back
A criminal investigation into money laundering failures at Monzo has been reduced to a civil matter, while UBS has been fined in Switzerland for failing to report suspicious transactions related to a former head of state.

FCA Drops Criminal Investigation Into AML Failures At Monzo

UK neobank Monzo has announced that it is no longer under criminal investigation for anti-money laundering (AML) failures by the Financial Conduct Authority (FCA).

However, the bank remains under investigation for potential breaches of the FCA's Principles for Businesses and related AML rules as a civil matter, it said.

Monzo confirmed the news in its 2024 annual report, which was published this week.

The criminal case dates back to 2021, when Monzo was informed by the FCA that it had opened an investigation into the bank for possible violations of the Money Laundering Regulations 2017.

In November 2023, Monzo was informed that this investigation is now closed and criminal charges will not be filed.

UBS Fined $55,000 For AML Failures Related To Yemen’s Ex-President

Switzerland’s Ministry of Finance has fined UBS Bank CHF50,000 ($55,000) for failures to flag suspicious transactions to Ali Abdullah Saleh, former president of Yemen.

According to local media, the penalty is concerned with a payment of CHF9m ($10m) which was made to Saleh by the Sultan of Oman in 2009.

The transaction triggered internal alerts at UBS, but instead of contacting the Money Laundering Reporting Office Switzerland (MROS) as required, employees simply noted the transaction in an internal dossier.

“It is common knowledge that wealthy rulers in the Arab world support their poorer colleagues with such gifts,” they wrote.

The investigation into UBS began in 2021 and it took two years for prosecutors to obtain the relevant files from the bank, the ministry said.

EU Supervisory Authorities Publish Key Resources For DORA Reporting Trial

The European Supervisory Authorities (EBA, EIOPA and ESMA) have released essential resources for an upcoming “dry run” of the Digital Operational Resilience Act (DORA).

This exercise, announced in April 2024, focuses on reporting registers of information. The published materials include example templates for registers of information in Excel, a draft technical package for reporting featuring a data point model (DPM), annotated table layout and validation rules, and an optional virtual basic application (VBA) macro tool to help convert Excel templates into .csv and .zip files for submission. 

Additionally, a comprehensive FAQs document is provided to assist participants in the dry run, which aims to clarify supervisory expectations for formal reporting starting in 2025.

The participating financial entities are expected to submit their registers of information to the ESAs through their competent authorities between July 1 and August 30.

ESMA Publishes Final Report On Conflict Of Interest Rules For Crypto Firms

The European Securities and Markets Authority (ESMA) has released its final report on the rules governing conflicts of interest for crypto-asset service providers (CASPs) under the Markets in Crypto-Assets (MiCA) regulation. 

The report has now been sent to the European Commission and ESMA has said that it will provide further advice and technical guidance in this area if requested.

The report outlines draft regulatory technical standards (RTS) aimed at clarifying requirements related to the vertical integration of CASPs. 

These standards also seek to align with the draft rules of the European Banking Authority (EBA) for issuers of asset-referenced tokens (ARTs).

The RTS include updates on policies and procedures for identifying, preventing, managing and disclosing conflicts of interest, tailored to the scale, nature and range of services provided by CASPs. 

Additionally, the report provides detailed methodology for conflict of interest disclosures.

Chris Hemsley To Depart Payment Systems Regulator

A change of direction could be in store for UK payments regulation as the head of the key regulator has announced he is stepping down.

Chris Hemsley, managing director of the UK's Payment Systems Regulator (PSR), will join Fingleton, a regulatory advisory service, in autumn this year. 

A Fingleton press release seen by Vixio confirmed that Hemsley will join the consultancy that is already home to his former colleague, Natalie Timan, who served as head of strategy and intelligence at the PSR until November 2023. 

Hemsley's departure comes at a busy time for the regulator. The PSR’s controversial reimbursement requirements for authorised push payments are set to come into force on October 7 this year.

Swift, Global Banks Turn To AI To Tackle Cross-Border Payments Fraud

Swift has announced two AI-based experiments in collaboration with its member banks to explore how AI could assist in combatting cross-border payments fraud.

In the first pilot, Swift will enhance its existing payment controls service, which helps financial institutions detect anomalies that could be indicative of fraud, by using an AI model.

This aims to create a more “nuanced and accurate” picture of potential fraud activity, using historical patterns of activity on the Swift network.

Swift will also work with payment controls customers to refine the enhancement, and the test will use customers’ own live traffic data — giving the findings real-world applicability.

In a separate experiment, Swift has convened ten financial institutions to test how it can use advanced AI to analyse anonymously shared data from different sources.

“AI’s capability for confidential data sharing could be a game-changer for the industry,” said Swift. “The tests could lead to the wider use of information sharing in fraud detection.”

Global banks, such as BNY Mellon, Deutsche Bank, DNB, HSBC, Intesa Sanpaolo and Standard Bank, will take part in the second pilot.

Our premium content is available to users of our services.

To view articles, please Log-in to your account, or sign up today for full access:

Opt in to hear about webinars, events, industry and product news

To find out more about Vixio, contact us today
No items found.
No items found.