Teamwork is crucial in the fight against financial crime, the joint executive director of enforcement and market oversight at the Financial Conduct Authority (FCA) has said.

Steve Smart used his speech at a recent industry event to highlight the importance of collaborating with partner agencies to mount an effective response to money laundering and other financial crimes.

At the City and Financial Global Financial Services Investigations and Enforcement Summit held at the end of June, Smart revealed that the FCA was focusing increasingly on working together with other regulators and law enforcement agencies to stay ahead of criminals.

“Key to all our work is collaboration with partner agencies to strengthen our collective response to any issue,” explained Smart.

“For financial crime and fraud this means working with a wide range of agencies as part of the National Fraud Strategy. And of course, industry is crucial in all this too. After all, firms stand to lose heavily to fraudsters, and it is in all our mutual interests to tackle this type of crime.”

Smart used the opportunity to explain to attendees what the FCA was doing to improve its response to money laundering, fraud and other financial crimes.

“We are always mindful of the need to constantly improve and evolve, to identify potential harm sooner, prioritise our response and progress our cases at greater pace,” said Steve Smart.

“Across the FCA we are developing how the different strands of our organisation – enforcement, authorisations and supervision – work in a more integrated way to achieve this.

“We have a range of criminal and regulatory tools across the organisation, and we are looking to deploy the right tool to deal with the right issue quickly,” he continued.

The FCA’s Steve Smart believes the regulator’s role has evolved to account for this shift. “When it comes to countering financial crime, we are in many respects a law enforcement agency as well as a regulator,” he said in his speech.

“We must stay a step ahead of the criminals, whether it is to pre-empt the way they use new technology such as AI and deep fakes or whether it is to work together with the firms we regulate, to ensure their systems and controls keep a step ahead of those seeking to exploit them.

“Alongside prevention, we recognise the need for a strong enforcement response to maximise the deterrence impact of our work.”

In his speech at the financial summit, Smart revealed that although fraud still accounts for nearly 40% of national crime, some progress was being made.  

There were 3.1m reported incidents of fraud in 2023, a decrease of 16% compared to the previous year. In 2023, 2.6 million adults were victims of fraud, half a million fewer than in 2022.

In 2023, the total losses to fraud were down by 4% to £1.17bn, according to the UK Finance annual fraud report.

Technological advances mean that fraud typologies continue to evolve. Pre-pandemic, the traditional age profile of victims reporting investment fraud to Action Fraud was 50 to 69 years old. However, in 2023, those in the 20 to 39 age group were just as likely to report being a victim of fraud, a shift Smart attributed partly to changes in technology and the rise in social media promulgated investment scams.

A joined-up approach is crucial for an effective response to UK financial crimes. “We cannot do our detective work alone,” said Smart. “Criminals will always pivot to exploit the weakest firms and sectors, so sharing data and intelligence is a vital tool in strengthening our defences.”

“We must all invest in the capabilities and relationships that will prevent and pursue those who seek to undermine our hard-won reputation as one of the world’s leading financial services sectors,” he urged.

Read Steve Smart’s full speech from the City and Financial Global Financial Services Investigations and Enforcement Summit here.

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