Financial crime review and improvement programme

Identification and delivery of effectiveness and efficiency enhancement

Client requirement

No bank operates without the risk of its customers seeking to launder money or evade financial sanctions. Mitigation of financial crime risks continues to appear high on the strategic agenda for most banks, predominantly in response to regulatory scrutiny in this area. There is an increasing focus on going beyond simply putting controls in place to ensuring they are effective in the context of the organisation’s unique risk exposure.

Our client was a UK challenger bank who required a review of its financial crime control environment to identify improvements from an effectiveness and efficiency perspective. While controls were in place which were largely in line with industry, our client required specialist subject matter expertise to reach confidence that tools were suitably configured according to risk profile and appetite.

Baringa’s role

We undertook a six-week maturity assessment of our client’s transaction monitoring, customer screening and payment screening tools and the operational processes which supported these. We interviewed key stakeholders, reviewed risk management and system controls, and shadowed first-line risk teams to rapidly form a view of the extent to which key risks were being managed.

We produced a detailed report setting out areas of improvement and a clearly defined roadmap to deliver these changes, prioritised based on the severity of the residual risk and the complexity to embed the required changes.

Outcomes and impact

Our client had a much more transparent view of the effectiveness of the financial crime controls they had in place and the priority steps they needed to take in order to address deficiencies in controls. They invited us to continue to support in improving their controls in areas where they required additional subject matter expertise.

We helped our client to, not only remediate their controls and refresh their policies and procedures, but also to increase in-house expertise so that they could continue to make improvements themselves. The support we provided helped to reduce residual financial crime risks in the bank as well as making significant efficiency improvements.