Identify potential financial crime within your organisation

This standard is about identifying potential crime within your organisation. You must monitor transactions and other business activities to identify potential financial crime, within your organisation. You must have all of the relevant information at your disposal to allow you to make accurate and informed judgements about the activity you are monitoring and to identify potential financial crime and respond to actual crystalised events. This standard is relevant to roles in countering financial crime.

1. Keep up-to-date with financial risk indicators, typologies, surveillance, and prevention and detection methods.
2. Identify effective management information to identify actual financial crime events within your organisation.
3. Develop effectiveness management information where none exist.
4. Analyse the root causes of financial crime events.
5. Develop and maintain an awareness of usual business activity, employee and client behaviour as appropriate.
6. Monitor client, employee, and third-party supplier behaviour and business activity on a regular basis to identify unusual occurrences.
7. Observe relevant boundaries of confidentiality and data security when monitoring business activities and transactions.
8. Ensure you have access to all available information that will enable you to detect potential financial crime.
9. Assess transactions and business activity against employee, client, and other business information available to you.
10. Accurately identify the type and nature of suspicious activity or potential financial crime.
11. Escalate your findings as appropriate following internal procedures.

1. Your organisation’s strategy and approach towards countering financial crime.
2. What might be regarded as suspicious or potentially suspicious activity.
3. How to identify actual financial crime events.
4. Procedures for detecting potential financial crime such as monitoring systems.
5. Usual client/third party behaviour and how to identify deviations from this.
6. Boundaries/remit of your authority in monitoring business activity.
7. Information that you are permitted to obtain and use to detect potential financial crime.
8. How to undertake financial crime investigations in your organisation.
9. Records that need to be maintained, how this should be done and the relevant procedures to follow.
10. Procedures for escalating and reporting crime, both internal (e.g. whistleblowing) and external.
11. Your organisation’s disciplinary process and procedures.
12. Relevant records required and how these should be maintained.
13. The legislation, regulations and codes of practice, relevant to you and your organisation and any specific obligations.

"Empowered Authority
This is any individual or authority that is legally entitled to make a request of
your organisation. This most often takes the form of a request for information
and in the cases of financial crime is likely to originate from a law enforcement
agency or regulator.
Financial Crime
This includes any office involving money laundering, terrorist financing, fraud
or dishonest or market abuse. (Definition based on the FCA definition of
financial crime). This includes financial crime both internal and external to a
financial services organisation.
Legal and regulatory requirements
This refers to a range of obligations incumbent upon financial organisations
and is commonly referred to as ‘compliance requirements. The legal and
regulatory requirements of an organisations or individual/s within it (such as
‘approved persons) may differ slightly according to the type of financial
organisation and the services it offers. The regulator of all providers of
financial services in the UK oversees a number of regulated activities under
powers derived from the Financial Services and Markets Act 2000.
A number of other pieces of UK legislation are relevant to the countering of
financial crime, such as the Proceeds of Crime Act (POCA), the Serious
Organised Crime and Police Act (SOCPA, the Fraud Act 2006, for example.
UK financial institutions are also subject to European Commission legislation
enacted by the British Government such as the Market Abuse Directive and
the Basel 2 Accord (for capital adequacy).
Financial organisations, like any other employer, are also subject to a range of
legal requirements covering areas such as discrimination, equality and
diversity, Health and safety and Data protection.
Organisation
This refers to an organisation that offers financial services this could be
insurance, investment, lending and credit, pensions, securities and
derivatives. It includes organisations in both the public and private sector.
Systems and controls
The practices and procedures put in place to protect an organisation from
financial crime. In some cases it is accepted that certain (or indeed all) types
of financial crime cannot be wholly prevented, but controls can limit its extend
and impact.
Crystalised event
the risk has materialised and the controls that were in place to deal with the
risk were found to be ineffective. Th is would prompt a review of the controls
and re-testing to ensure the risk cannot happen again"