Banking Risk and Regulation

Thrilled to share my latest article published today in the Financial Times, Banking Risk and Regulation In this piece, I present a new perspective on the evolving "fit and proper" criteria defined by regulators globally and how the Central Bank of the UAE (CBUAE) is taking the lead in strengthening banking stability. As risks continue to evolve at an unprecedented pace, I explore why a fresh approach to risk governance is critical to ensuring that CROs and financial institutions are equipped to navigate these challenges. Would love to hear your thoughts—how do you see regulatory frameworks adapting to the shifting risk landscape? #RiskManagement #Banking #FinancialRegulation #CRO #Governance #CBUAE

📉 Global fines for compliance failures in financial services fell 15 per cent in 2024, but penalties to banks for anti-money laundering breaches skyrocketed. So are lenders in the firing line, or is there more to it? Gabriel Whitwam and Francesca Washtell have dug into the numbers to pull out the new findings in a series of charts. 💰 Watchdogs issued $4.59bn in penalties in 2024, down from $5.08bn the previous year, according to figures from SteelEye. The surveillance tech firm attributed the fall largely to a one-off $4bn fine against cryptocurrency platform Binance in 2023. ⚖️ By contrast, the largest single levy in 2024 was $3bn, imposed by the US Department of Justice on Canada’s TD Bank for failing to prevent money laundering. 👀 Read more below. https://lnkd.in/exrXWT7b #Complance #AMLfines #Fines #Banking

🛡️ As banks grapple with challenges ranging from capital standards to cyberattacks, the chief risk officer stands at the frontline of safeguarding stability. But does this centralised model still work in the modern era, asks Sajid Iqbal. 🏛️ This question has risen to the top of the agenda in the UAE after the central bank issued more strict fit-and-proper rules for all authorised positions, including CROs at banks. The new regulations, which aim to raise the leadership bar in the Middle East’s financial hub, underscore the need for a CRO to have more than just qualifications. 🌍 I see that the job has evolved far beyond its traditional focus on credit risk and regulatory compliance. Today, financial institutions contend with cybersecurity threats, environmental challenges, operational disruptions, conduct issues and more. ⚖️ However, in many organisations, all these responsibilities continue to be centralised under the CRO. 🚨 This overreliance on a single individual is not only impractical but also a significant risk. When one person oversees such a vast array of challenges, oversights and systemic vulnerabilities become more likely. 👀 Read more below. https://lnkd.in/e8vwXV3m #ChiefRiskOfficer #CRO #UAE #Banking #BankingIndustry

⚠️ The UK’s anti-money laundering framework fosters excessive caution. This bleeds into a debanking minefield, forcing banks to navigate conflicting expectations, writes David Hamilton of Howard Kennedy LLP. 🏦 Debanking first came under scrutiny after a very public spat between Nigel Farage, now leader of the Reform political party, and the private bank Coutts. 🔎 The Financial Conduct Authority’s investigation, first published soon after the high-profile affair in 2023, drew attention to myriad compliance contradictions that still need to be addressed. 📊 Given that the number of complaints to the Financial Ombudsman Service about “restricted account closures” nearly tripled between 2022 and 2024, navigating this is becoming increasingly important for lenders. 👀 David explains below how to manage these pressures and what kind of AML measures the government should consider reforming. https://lnkd.in/ew2d6WVv #AML #Debanking #Banking #BankingIndustry

There was a lot to unpick from the the Financial Conduct Authority CEO's recent interview with Following the Rules. This piece for Banking Risk and Regulation focuses on Nikhil Rathi's thinking on the government's efforts to make the "administratively burdensome" accountability regime for senior City workers less so. It also touches on Rathi's expectations of challenger banks as they scale, his views on the FCA's future, his highs and lows as CEO and how he navigates the "intense public scrutiny" that comes with the job. Click on the links below to read the piece. You can also listen to the full interview here: https://lnkd.in/eWNtHV9U #SMCR #seniormanagersregime #followingtherules #podcast #financialregulation

⚖️ The head of the UK financial watchdog is backing government efforts to consider a more “proportionate and flexible” approach to holding City staff below senior management level accountable. 🔄 Nikhil Rathi, CEO of the Financial Conduct Authority, is consulting on rethinking some of the “strictures laid out in legislation” to remove the certification of junior staff from the rules. 💰 It comes as Rachel Reeves, the chancellor, will promise business leaders later today that she will go "further and faster to boost growth". She used last November’s Mansion House speech to label the present senior managers and certification regime as “overly costly.” Banks are required under statute to check large numbers of staff in risk-taking positions for suitability and record them in a public register. 🎙️ Speaking to Lucy McNulty’s Following the Rules podcast, Rathi says: “Firms themselves make judgments on who they certify — there are arguments both ways as to whether [they’ve] captured too many people and whether that’s flexible enough.” 📜 Asked whether he would support removing the certification element, he replies: “That’s what the Treasury and the chancellor have talked about. What is under discussion is if it’s taken out of legislation, is there a more proportionate, flexible model that can be applied by us and by the Prudential Regulation Authority? We’re supportive of that direction of travel.” 📉 Rathi reiterates that lawmakers must accept “tolerable failure” as a price for unlocking growth. The FCA chief, who runs an organisation of 5,300 people, also discloses that the watchdog would update its “rules and guidance” on non-financial misconduct “within weeks.” 🚨 In addition, he warns fast-growing challenger banks like Starling and Metro — who have been rapped for lax fincrime checks — that their anti-money laundering controls must scale as quickly as their “incredibly fast growth.” 👀 Read the Q&A for more below. https://lnkd.in/eZ8T_FAU #DeRegulation #Banking #BankingIndustry

🌍 The UK’s position as a global financial hub rests on its robust regulatory framework. High standards and a dependable rulebook are written into its financial DNA. But in a fiercely competitive global market, piling on more rules isn’t always the answer, and the UK risks losing its edge, writes Varun Paul of Fireblocks 🇺🇸 As the US shifts course under President Donald Trump, governments and regulators worldwide are reassessing their approaches. For now, UK rule-makers have opted for patience over haste. ⏳ On January 17, the Prudential Regulation Authority, in consultation with HM Treasury, announced a one-year delay to implementing Basel 3.1 in the UK, pushing it back to January 1 2027. The rationale? To await “greater clarity” on US plans for implementation. 💡 Having spent 13 years at the Bank of England in various roles, I think this move is sensible. Implementing these final post-crisis banking reforms ahead of the US would risk undermining UK competitiveness, especially when the US’s overriding priority is “Making America Great Again.” 📜 The US has a history of delaying domestic implementation of international standards when they conflict with political priorities. 🤔 So why should the UK rush? With the government urging supervisors to adopt a growth mindset, there are more pressing areas — like digital assets — to focus on. 👀 Read more for Varun's thoughts on what he UK should do - and how the No 8 London bus played an outsized role in the 1988 Basel Accord. https://lnkd.in/eHr23NHc #Basel3 #BaselIII #Banking

Here's my latest for Banking Risk and Regulation on today's episode of Following the Rules featuring the Financial Conduct Authority's CEO Nikhil Rathi on the regulator's plans to shift away from detailed rulemaking as part of its efforts to create “a different relationship” with the City. He also discusses his regulatory priorities for 2025 and beyond, the FCA's future, his efforts to stay resilient in the face of "intense public scrutiny" and constant criticism, and plenty more besides. You can listen to the episode here: https://lnkd.in/eWNtHV9U Or read BRR's piece on it by clicking on the links below... #followingtherules #podcast #financialregulation #financialservices #growthduty #fca

📵 The head of the UK’s financial regulator has no plans to publish “wholesale new rules” to stop City workers using WhatsApp for unauthorised business purposes – despite acknowledging such practices remain “a significant issue”. 🕵️♂️ Nikhil Rathi, chief executive of the Financial Conduct Authority, says the finance sector should expect “a different relationship” with the watchdog in the coming years as the FCA moves away from “detailed rules”. 📻 “We don’t think firms should expect from us lots of detailed rules to try and pin down every possible scenario that they are planning for,” he told Lucy McNulty's Following the Rules podcast. 📲 Since 2022, the regulator has been speaking with the City’s largest banks over their employees’ use of encrypted messaging apps following a US crackdown on bankers using private apps to discuss deals. 💸 Financial institutions have been fined around $2.8bn over employees’ unauthorised use of text and messaging platforms, violating US record-keeping regulations. 🗣️ “It’s obviously a significant issue with the prevalence of different forms of communication,” Rathi said. “We’re not planning any wholesale new rules around this, [but] we’re working with firms on a case-by-case basis to understand how they are monitoring these types of activities.” 💡 Read more below. https://lnkd.in/e5d6mrF9 #Banking #FCA #BankingIndustry #WhatsApp

🏦 Wall Street banks once proudly and publicly positioned themselves as champions of diversity, equity and inclusion, particularly after the global impact of George Floyd’s murder in 2020. Yet momentum is faltering amid mounting legal challenges and a polarised political landscape. Can banks keep up their commitments? ⚖️ DEI leaders say the initial “gung-ho” enthusiasm for social justice programmes has given way to a measured “cooling-off” period marked by widespread “caution”. 📉 It comes as activists in Texas, Florida and Georgia have filed lawsuits claiming that DEI initiatives discriminate against white individuals, prompting some banks to reduce their efforts. 🛠️ Goldman Sachs, for example, recently expanded eligibility criteria for its Possibilities Summit — a career exploration programme originally tailored for Black college students — to include white applicants. 📊 Pew Research Center data shows that more than half of US employed adults (52 per cent) undertook DEI training or meetings at work in 2023, while the number of chief diversity and inclusion officer roles in the US grew by 169 per cent between 2019 and 2022, according to LinkedIn research. ⚠️ Financial institutions that wish to preserve their DEI initiatives now face heightened legal risks, however, especially in states such as Florida, where governor Ron DeSantis has championed measures to curtail diversity programmes. 🚫 His Stop WOKE Act sought to block DEI considerations in hiring and education, but much of the law was struck down by a federal judge last year for violating free speech protections. 💥 Undeterred, DeSantis remains committed to his agenda, which has received vocal support from new president Donald Trump. Last week, all federal employees working on DEI programmes were put on paid leave. 💡 Story by Eden Harris. Read more below. https://lnkd.in/deAgfJYc #DEI #Trump #Banking