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- UK Regulator Urges Financial Firms To Prioritise Fair Value For Consumers
- Young People Targeted To Be Money Mules, Irish Banking Lobby Warns
- Singapore Banks Introduce Singpass Face Verification To Fight Phishing Scams
- New UK Rules To Protect Access To Cash Already Having An Impact, Says FCA
- Tokenisation And Programmability Project A Success, Says UK Finance
- Latvijas Banka Issues Warning To SIA Transact Pro Over Capital Requirement Breach
- Hungary Sees Surge In Instant Credit Transfers In Q2 2024
- Chinese-Language Money Service Business Hit By AML Fine In Canada
- OCC Takes Enforcement Action Against Wells Fargo Over AML Deficiencies
- Cypriot Authorities Issue New Digital Onboarding Guidelines
UK Regulator Urges Financial Firms To Prioritise Fair Value For Consumers
The Financial Conduct Authority (FCA) has called on financial institutions to reassess their products and services to ensure fair value for consumers.
The FCA’s latest update on the Consumer Duty, a regulatory requirement that came into force for open products in July 2023 and closed products a year later, highlights the need for firms to ensure that the prices consumers pay are reasonable compared to the benefits that they are receiving.
The report highlights the need for tailored fair value assessments across customer segments, and the need to address cross-subsidisation that may harm vulnerable consumers.
It also states that evidence-based assessments are key, as the FCA notes both good and poor practices.
The FCA urges firms to take "prompt action" on fair value concerns, adjust product features and improve communication, warning of intervention if improvements are not made.
The report also says that governance is crucial for compliance, with the FCA encouraging board oversight to drive better outcomes.
Young People Targeted To Be Money Mules, Irish Banking Lobby Warns
In the past three years, more than €44m has been laundered through money mule accounts in Ireland, according to FraudSMART, a fraud awareness initiative by the Banking & Payments Federation Ireland (BPFI).
Nearly 9,000 cases of money muling have been identified, with amounts ranging from €5,000 to €10,000 per case, and with many of the accounts belonging to young people aged 18 to 24.
“It’s crucial that young people understand that this is not a ‘victimless’ crime, and the consequences are severe for those who get involved," said Niamh Davenport, the BPFI's financial crime chief.
According to the BPFI, nearly half of 18 to 24 year-olds have been approached or know someone who has been asked to transfer money through their bank account.
Moreover, one in three are willing to act as mules, which has spurred government minister Patrick O’Donovan and the Union of Students Ireland (USI) to endorse FraudSMART's #DontBeAMule campaign on Snapchat and TikTok to raise awareness.
The campaign emphasises the consequences of money muling, including jail time, funding criminal activity, and restrictions on travel and work visas.
Singapore Banks Introduce Singpass Face Verification To Fight Phishing Scams
Major retail banks in Singapore will begin implementing Singpass Face Verification (SFV) over the next three months, to strengthen the digital token setup process for retail banking customers.
According to the Monetary Authority of Singapore (MAS) and the Association of Banks in Singapore (ABS), SFV will be triggered in higher-risk scenarios to strengthen and complement existing authentication methods for digital token setup.
SFV uses a face scan to verify a customer’s identity against national records, before the customer’s digital token can be activated for use.
This makes it more difficult for a scammer to take over a customer’s digital token on his or her own device using phished credentials, such as an SMS, a one-time password (OTPs) and/or bank card information.
Customers who do not have a Singpass account may register for one and download the Singpass app before setting up their digital token.
New UK Rules To Protect Access To Cash Already Having An Impact, Says FCA
The UK Financial Conduct Authority (FCA) has said its new rules to protect access to cash are already having a positive impact in local communities.
Since the rules were confirmed in July, LINK, which manages the UK’s cash access and ATM network, has reassessed the needs of local areas where banking services are changing.
As a result, 15 communities which had not previously been assessed as needing a banking hub will now get one; six communities will now have an ATM at their banking hub; and six areas will get an automated deposit service or enhanced Post Office.
These changes are a direct result of the new rules, the FCA said. Under the rules, banks and building societies must assess whether changes to local services, such as closing branches or cash machines, leave local communities lacking ways to take out or pay in cash.
Additionally, residents, businesses, local representatives and charities who feel there is a gap in cash access can request a review.
LINK will then have 12 weeks to do an assessment which examines whether there are gaps in the ability to deposit and withdraw cash, and if significant gaps are identified, banks and building societies will provide additional services.
Tokenisation And Programmability Project A Success, Says UK Finance
UK Finance has announced the successful completion of the Regulated Liability Network (RLN) Experimentation Phase.
This new financial market infrastructure, designed to enhance payments and settlement systems, promises capabilities such as tokenisation and programmability.
Since April 2024, UK Finance has partnered with Barclays, HSBC, Visa, Mastercard and technology firms such as R3 and Quant, exploring use cases and potential benefits such as fraud reduction, increased home-buying efficiency and lower costs for failed payments.
Key findings highlight that the RLN, in collaboration with initiatives such as open banking, could spur market innovation, offering programmable payments and a platform for new firms to engage with established institutions.
According to UK Finance, the legal framework in the UK is flexible enough to support such advancements, paving the way for ongoing industry and regulatory collaboration.
With this phase completed, UK Finance encourages further engagement as the industry moves forward in transforming the UK payments landscape.
Latvijas Banka Issues Warning To SIA Transact Pro Over Capital Requirement Breach
SIA Transact Pro, a Latvia-based licensed provider of payment card issuing, acquiring and online payment acceptance tailored services, has been censured by the local financial regulator for compliance failures.
Latvijas Banka's Supervision Committee has issued a formal warning to the e-money institution for failing to meet capital requirements outlined in the Law on Payment Services and Electronic Money.
The central bank has also mandated that the company revise its internal control systems within three months to enhance its management information processes and improve the planning of its own funds.
In response, SIA Transact Pro is currently taking corrective actions, the regulator noted.
Hungary Sees Surge In Instant Credit Transfers In Q2 2024
The total value of instant credit transfers in Hungary increased 28.4 percent year-on-year in Q2 2024, according to data released by the country’s central bank, Magyar Nemzeti Bank.
The proportion of household accounts initiating mobile credit transfers also rose sharply, with 38 percent of accounts using this method during the quarter. And more than 5,000 new card acceptance points came online, contributing to a 4.6 percent increase in POS terminals.
Although the number of cash withdrawals dropped by 4 percent, their total value fell by 12.1 percent, signalling a shift towards digital payments, especially as payment service providers' revenues grew by 11.1 percent.
The number of card-related fraud incidents fell by 8.9 percent from the previous quarter, although the total value of fraud increased by 2 percent.
Phishing, psychological manipulation and unauthorised access to payment methods were the most common fraud tactics. Fraud in non-card transactions also decreased in value by 6 percent, as providers enhanced fraud prevention measures.
Chinese-Language Money Service Business Hit By AML Fine In Canada
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has fined Canada Changjiang Management, a money service business that caters to Chinese-speaking clients, C$315,000 ($230,000) due to anti-money laundering (AML) failures.
In a statement, the regulator said the fine relates to conduct observed in 2022.
Following a compliance examination, Canada Changjiang Management was found to have failed to submit suspicious transaction reports where there were “reasonable grounds” to suspect money laundering or terrorist financing activity.
The company also failed to report large cash transactions and electronic funds transfers of C$10,000 ($7,350) or more, and failed to maintain written compliance policies and procedures.
FINTRAC noted that the administrative penalty has been paid and the proceedings have now ended.
OCC Takes Enforcement Action Against Wells Fargo Over AML Deficiencies
The Office of the Comptroller of the Currency (OCC) has come to a formal agreement with Wells Fargo Bank, having uncovered significant deficiencies in the bank’s anti-money laundering (AML) controls and financial crime risk management practices.
The enforcement action highlights issues in areas such as suspicious activity and currency transaction reporting, customer due diligence and the bank’s customer identification and beneficial ownership programs.
Wells Fargo, which is one of the US’ largest financial institutions, has committed to take corrective actions to enhance its compliance with the Bank Secrecy Act and AML and sanctions rules.
Cypriot Authorities Issue New Digital Onboarding Guidelines
The Cyprus Securities and Exchange Commission (CySEC) has released a new policy statement aimed at enhancing non-face-to-face (NFTF) customer onboarding using electronic methods.
Published on September 6, 2024, the policy targets entities such as crypto-asset service providers (CASPs) and aims to ensure compliance with anti-money laundering (AML) regulations under the Prevention and Suppression of Money Laundering Activities Law of 2007.
The policy outlines how firms should implement the suggestions from the earlier consultation paper (CP-02-2020), particularly regarding remote customer onboarding solutions (RCOS).
It mandates a comprehensive risk assessment before adopting specific technologies and provides guidelines to ensure that onboarding processes meet regulatory standards, while also aligning with the European Banking Authority’s guidelines.
Entities must notify CySEC before employing these methods, although prior authorisation to do so is not required.
