Regulatory gap analysis: FCA review on use of the National Fraud Database
The FCA has recently conducted a review of how UK payment service providers (PSPs) manage money muling risks, focusing on their use of the National Fraud Database (NFD) and money mule account detection tools. This builds on previous findings shared in 2023, where the FCA emphasized the need for firms to strengthen their controls in detecting and preventing money mule activity.
As part of this review, the FCA found that while firms are generally committed to preventing fraud, firms can do more to enhance the effectiveness of detection and reporting systems. Key areas for improvement include; the consistency in reporting identified money mules to the NFD, response time to fraud alerts, real-time checks against the NFD and calibration of transaction monitoring tools. The FCA also highlighted challenges in the quality of fraud investigations and the sharing of information with external agencies.
Our gap analysis breaks down the FCA’s key findings and offers practical guidance for firms looking to improve their fraud prevention strategies. Our self-assessment questions are to support you evaluate how effectively your financial crime framework is addressing the risk of money muling. See here to read our full gap analysis:
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