In 2008 Barack Obama campaigned for the Presidency with a promise of change, “Change we can believe in.”  Well change did arrive in the shape of the global financial crisis which was not the change many had hoped for.  Well in 2023 change is coming to the world of AML, a big change.  At the end of September the Payment Services Regulator (PSR) in the UK published a consultation paper, ahead of a change to regulation in 2023.  The recommendations from the PSR are profound and will reach far beyond the shores of the U.K.

At a high level, the PSR is asserting banks and firms that launder the proceeds of fraud are partially responsible and accountable for the fraud itself. Pursuant to which the PSR is proposing to legislate that victims of bank fraud will be fully and expediently reimbursed.  50% of the reimbursement will be paid by the bank where the victim holds their account and the other 50% will be paid by the bank where the money is initially laundered.

Yes, there will be disputes, there will be challenges, including the prudential status of some smaller firms where a lot of money appears to be laundered.  Nonetheless, the PSR will press ahead in order to protect customers and reduce instances of fraud.

Anyone who is unsure of the implications of this proposed change, stay with us over the coming weeks and we will explain more. At a high level, the commercial implications here are significant.  Put simply  laundering money will put you out of business, so change is coming.

It has to.  There will be inconvenience to legitimate customers and their transactions, but this will be tolerated.

The fact is, money cannot be stolen from a bank account without controlling another account to pay the stolen funds into. The PSR want to ‘incentivise fraud prevention, by incentivising AML. This is a big change and will be welcomed by some as much as it will be resisted by others.  What’s your point of view?

Anonymous (Senior Compliance Consultant)

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