Indeed, challenger banks were found to have failed to undertake financial crime risk assessments on their clients in certain circumstances, according to the review conducted over 2021 and published by the FCA on Friday, April 22. The challenger banks under consideration were those that were relatively new to the industry, and that provided a rapid and straightforward application procedure. Specifically, it consisted of six challenger retail banks, mostly comprised of digital banks, and served more than eight million clients in total. Sarah Pritchard, Executive Director, Markets at the FCA, said:
Review found some evidence of good practice
After conducting a thorough investigation, the review team discovered some indications of excellent practice, such as the creative use of technology to quickly identify and authenticate clients. While Dr. Henry Balani, Global Head of Industry and Regulatory Affairs for Encompass Corporation, shared his insight with Finbold on the matter: He added: In general, the digital expertise of challenger banks such as Revolut is well-known. Still, the necessity to sustain high levels of consumer growth while also managing rising financial crime threats necessitates continuing innovation on the part of all financial institutions.
