Cash-based money laundering: FCA announces a new multi-firm review

Last week, the FCA updated its cash-based money laundering (CBML) webpage. The page looks the same at first glance – blink and you might have missed it. And yet in the very final paragraph, there is some crucial information for any firms who are part of the Post Office Banking Framework Agreement (sometimes called ‘Everyday Banking’) or who accept cash deposits through channels other than their own branches – the regulator is launching a proactive multi-firm review in 2025/26. 

Multi-firm reviews (previously ‘thematic reviews’) are the regulator’s way of assessing multiple firms – typically between 10 and 20 – in relation to one particular risk. The FCA usually visits each firm in the sample to test their controls in key areas relating to that risk, and each firm receives a feedback letter. Further action may be taken, including the use of regulatory tools, if the FCA is unhappy with the firm’s controls. The FCA will probably publish a report as a result of the work, and the whole process usually takes 9-12 months. 

As the FCA notes, the National Economic Crime Centre (NECC) has estimated that hundreds of millions of pounds are laundered each year through cash deposits at the Post Office. The FCA has spent the last three years working with firms who are part of the Post Office agreement to tighten up their controls in multiple areas to try to reduce the money being laundered through this channel. The key change was asking firms to put in place daily and annual limits for personal and business customers depositing cash, so criminals could not make multiple deposits in one day, for example. Transaction monitoring and a move towards card-based transactions over paper deposit slips were also areas of focus. One of the things the FCA will be likely to test is how the firms are measuring the impact of those changes. 

The other change to the CBML webpage was to highlight the FCA’s new regime to protect access to cash, which was introduced in September 2024. The FCA will expect any measures firms have taken to reduce CBML, including the introduction of limits, to have been balanced carefully with continuing to provide access to cash for those who need it, not disproportionately affecting legitimate customers. 

How can we help? 

I was the lead for the FCA’s cash-based money laundering workstream for three years, before I left to join Avyse in September 2024 and we have heaps of regulatory experience within the team. No-one outside the FCA knows more about this work than me. 

This puts Avyse Partners in a truly unique position to advise any firms who are part of the Post Office Banking Framework Agreement, or who facilitate cash deposits through another type of machine or hub. The FCA’s expectations on this are multi-faceted, and there can be a perceived clash with access to cash and consumer protection. Firms accepting cash deposits through the Post Office or through other means will be expected to balance the two, and it requires a nuanced approach to get it right. We can help you navigate that and prepare your firm for an FCA visit. 

The FCA hasn’t set out its sample size yet, but there are only around 30 firms/groups who could be visited as part of this review – so if you accept cash deposits through the Post Office or via another hub or machine, it’s highly likely you’ll be included in the FCA’s sample. Don’t leave it too late to prepare - email me at sam.jarvis@avyse.co.uk