Almost half of financial services firms believe financial crime has increased over the last two years, according to a report from the Financial Services Authority.
The survey of 655 firms reveals 46% believe financial crime has increased over the last two years, but it was major retail groups and large retail firms who were most likely to say this (70% and 67% respectively).
Financial crime was also considered to be increasing among 48% of the smaller retail firms, but they were also inclined to say there was no difference over the last two years (31% for small retail firms compared with 20% for larger retailers).
Those who said financial crime had increased were much more likely to say it would continue to do so in the next two years (80%), while among those who said it had decreased, 61% predicted it would continue to fall, compared to an average of 10%.
According to the report, those anticipating a continued increase were spending a higher proportion of time on it (16% on average) compared with those not expecting an increase (8%).
The major concerns around financial crime were financial loss to clients and regulatory action, cited by 68% of firms, followed by damage to corporate reputation and criminal charges (66%).
Small firms showed the most concern for wasted resources, such as staff time, with 39% citing this as a major concern.
Financial loss to the client was also cited as a major concern by 85% of financial advisers.
Firms rated the FSA as either ‘good’ (31%) or ‘fair’ (25%) on fraud and ‘good’ (34%) or ‘fair’ (22%) on money laundering.
A further 10% rated it as ‘poor’ on combating fraud and 8% rated it ‘poor’ on combating money laundering.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7034 2680 or email [email protected].IFAonline
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