FCA actions in 2021 resulted in financial organisations in the UK being fined £568 million in 2021. This total is made up by fines against major banks and action against individuals for insider dealing, non-financial misconduct and carrying out regulated activities without authorisation.
This data was contained in a new press release published to the FCA’s website, and analysed by a Parliament Street think tank. Experts concluded that the high quantity of financial penalties is in response to the new forms of financial crime buoyed by the Covid-19 pandemic.
Dr. Henry Balani, leading regulation expert for Encompass Corporation, commented: “The pandemic has provided criminals with the opportunity to defraud, launder and perpetrate other forms of financial crime with more efficiency than ever before.
“Lockdown, and the resulting dependence on digital services, has made it easier for criminals to impersonate legitimate services and scam consumers. On the other hand, it has caused difficulties for the financial institutions themselves to detect malicious activity, as digital identities are harder to verify than the physical or in-person alternatives that existed before the pandemic.”
Interestingly, however, the FCA demonstrated success when it came to protecting consumers. Its contact centre prevented £4 million being lost to scams, and the FCA secured £5m to be paid back to people who invested in companies that were not authorised to undertake financial activity in 2021. Also a record 1,300 warnings about scams were issued over the past year.
Furthermore, over £1.2 billion has been paid out to settle claims made by small businesses after the FCA won its Supreme Court case to clarify business interruption insurance cover.