Fraud in financial services

FCA requirements and supervisory focus on fraud prevention

The UK’s Financial Conduct Authority (FCA) requires authorised firms to establish and maintain systems and controls to counter the risk of being misused for various types of financial crimes, including fraud. These requirements are outlined in the Senior Management Arrangements, Systems and Controls sourcebook (SYSC) of the FCA’s Handbook. The FCA actively supervises and enforces these requirements to ensure firms have robust defences and risk management frameworks to identify and mitigate their financial crime risk. Additionally, the FCA employs various strategies and tools, such as monitoring social media for suspicious advertising and using Artificial Intelligence (AI) to help prevent fraud and scams.

An overview of FCA requirements on financial services firms to have in place systems and controls to prevent fraud and relevant guidance is set out in Practice Note: Introductory guide to fraud prevention in financial services—The role of the FCA in tackling fraud.

The FCA’s Financial Crime Guide (