The RegTech Pulse · 2026-06-17 · 33 min
Key moments - from our scoring
Substance score
50 / 100
Five dimensions, 20 points each
The UK is experiencing an extraordinary convergence of regulatory initiatives around economic crime that extends far beyond traditional money laundering concerns. Kathryn Westmore explains how this moment differs from previous economic crime plans by examining the evolution from the 2019-2022 Economic Crime Plan (ECP1) through the recently concluded ECP2, which was shaped by the Russia-Ukraine invasion and prompted long-overdue reforms like Companies House verification and supervisory architecture consolidation. The current landscape includes the Home Office's £250 million fraud strategy with its new £31 million Online Crime Centre, the anti-corruption strategy treating corruption as national security rather than regulatory risk, the FCA's consolidation of professional services supervision from 22 bodies into one, and simultaneous EU regulatory changes including the AML Regulation and new AMLA authority. Westmore emphasizes that what distinguishes this period is the explicit interconnectedness across fraud, anti-corruption, and anti-money laundering domains - where corruption facilitates criminal flows, sanctions evasion, and transnational organized crime. She argues that system leadership and clearly defined high-level principles are essential because actions meant for one strategy often appear in another, and key enablers like data sharing and public-private partnership cut across all initiatives. The interview addresses how financial institutions, previously treating corruption as a separate risk stream, must now recognize it as fundamental to detecting illicit finance.
It is a £31 million facility launching in April that brings together law enforcement, intelligence agencies, banks, mobile networks, and tech firms in one place to coordinate responses to online crime, representing a new coordinated capability beyond previous fragmented approaches.
Rather than treating corruption as a separate regulatory issue, the strategy frames it as a national security threat and demonstrates how corruption underpins fraud, sanctions evasion, and transnational organized crime - making it central to detecting illicit finance rather than a standalone risk.
The strategy calls out construction, infrastructure, public procurement, local government, and professional football as sectors not historically seen as corruption-exposed, with the independent football regulator tasked with strengthening anti-corruption capabilities.
The FCA will become the sole professional services supervisor, consolidating oversight from 22 separate professional body supervisors - a significant structural reform still in early implementation stages.
Multiple strategies (fraud, anti-corruption, AML) are running simultaneously with explicit interconnection rather than in isolation, the Russia-Ukraine invasion prompted urgency on long-standing issues like Companies House reform, and the UK holds the FATF presidency and G20 presidency, positioning it to lead international standards.
Our reviewer’s read on each dimension, with quotes from the episode.
The episode contains a few genuinely interesting insights - particularly the Operation Destabilize data on money laundering fee increases as a disruption metric, and the 'predicate agnostic' criminal network framing - but the bulk of the content is a survey-level walk through well-known regulatory developments that practitioners in this space would already know. Long stretches amount to listing legislation and describing the complexity of the landscape without adding analytical depth.
when the Russian-speaking money laundering network became aware of law enforcement interest in them and cash careers were kind of getting picked up off the street, the prices that they charged to organize crime groups to launder money increased
In some ways, they are kind of predicate agnostic
The disruption-as-price-elasticity framing (measuring success by what criminals now have to pay to launder money rather than arrests alone) is a genuinely non-obvious angle, but the core arguments - convergence of financial crime risk streams, need for system leadership, importance of public-private partnership - are well-established talking points in AML and RegTech circles that add little new thinking.
measuring success might come in a slightly different way if we're treating this as a sort of networked operation that we're trying to disrupt rather than kind of pick off individual notes
So where they were getting, you know, charged 3% fees for the kind of professional money laundering services, it was 5%
Kathryn Westmore is a credible policy and research expert with substantive background at RUSI and now a director-level role at the main UK banking trade body, giving her genuine access and relevance; however she is an advocacy and policy expert rather than an operational practitioner who has run compliance at scale inside a financial institution, which limits the operational specificity she can offer.
I joined UK Finance earlier this year and spent the four years before that at the Centre for Finance and Security at the Royal United Services Institute, where I led all of our research on financial crime there
we represent the views of 300 odd of our members, including engaging with government regulators, law enforcement, and other stakeholders
The episode provides a solid collection of concrete anchors - the 3% to 5% fee increase from Operation Destabilize, the 175% rise in UK sanction designations, £250m fraud strategy investment, £31m online crime centre, the September 2025 failure-to-prevent fraud commencement date, and consolidation from 22 professional body supervisors to one - but it also contains notable vagueness, particularly on asset recovery where the guest explicitly avoids citing the 'oft-quoted stat' and gives no recovery figures.
net designations to UK sanction lists increase by 175% year on year in 2025
So where they were getting, you know, charged 3% fees for the kind of professional money laundering services, it was 5%
The host structures topics logically and her scene-setting preamble is informationally dense, but her questions are open and rarely followed up; there is no pushback, no challenging of vague claims, and the host's own long monologues reduce interview efficiency and include promotional mentions of her employer's data products, making stretches feel like branded content rather than probing journalism.
I feel like that could be a documentary episode itself, probably
Amazing, amazing
Computed from the transcript - who did the talking, and the words that came up most.
2026 is a turning point for economic crime regulation in the UK. In this episode, Kathryn Westmore, Director of Financial Crime for UK Finance joins our Head of Regulation and Policy Katarina Pranjic to discuss how the UK’s economic crime framework is evolving following the conclusion of the Economic Crime Plan 2023 - 2026. They cover how anti‑corruption, fraud, AML and sanctions are being addressed through a more joined‑up approach, and what this means in practice for risk and compliance teams. This episode aims to help listeners cut through the volume of regulatory change, understand the strategic direction behind it, and understand the steps they need to take to future-proof their compliance strategies. Learn more about UK Finance here . Download the LexisNexis Risk Solutions Sanctions Pulse here. DISCLAIMER: The information provided in this podcast is for informational purposes only and is not intended to and shall not be used as legal advice. The views and opinions expressed in this podcast are solely those of the speakers and do not necessarily reflect the views or positions of LexisNexis Risk Solutions.
Transcribed and scored by The B2B Podcast Index.
1 - > Katarina Pranjic: Welcome to the RegTech Pulse podcast, where 2 - > industry experts discuss the latest trends in financial crime 3 - > compliance. 4 - > I'm your host, Katarina Pranjic, and I'm delighted to be 5 - > joined by Kathryn Westmore, Financial Crime Director at UK 6 - > Finance, to discuss the UK's economic crime response. 7 - > Kathryn, thank you so much for joining. 8 - > Before we start, could you introduce yourself and the work 9 - > of the UK Finance, please?
10 - > Kathryn Westmore: Yeah, absolutely. 11 - > And hi, Kat, thank you very much for having me. 12 - > Delighted to be here. 13 - > So, as you said, I'm the director of financial crime at 14 - > UK Finance.
15 - > I joined UK Finance earlier this year and spent the four 16 - > years before that at the Centre for Finance and Security at the 17 - > Royal United Services Institute, where I led all of our research 18 - > on financial crime there. 19 - > For people who are not aware of UK Finance, so we are a trade 20 - > industry body that represents the banking and the finance 21 - > sectors. 22 - > So we represent the views of 300 odd of our members, 23 - > including engaging with government regulators, law 24 - > enforcement, and other stakeholders, particularly on 25 - > the economic crime, financial crime agenda.
26 - > Thank you. 27 - > Katarina Pranjic: So let's set the scene because I think the 28 - > sheer volume of what has landed in the past 12 months or so is 29 - > genuine extraordinary and uh even for the standards of this 30 - > sector. 31 - > And I want to make sure that listeners appreciate that none 32 - > of this is happening in isolation. 33 - > So in March this year, the Home Office published a fraud 34 - > strategy that is a serious document, over 250 million of 35 - > government investments over the three years, structured around 36 - > three pillars Disrupt, Safeguard, and Respond.
37 - > And there is a new 31 million online crime center launching in 38 - > April to bring together law enforcement, intelligence 39 - > agencies, banks, mobile networks, and tech firms in one 40 - > place. 41 - > That is a genuinely new capability, and it's not a 42 - > standalone event, I would say. 43 - > If you zoom out, fraud is just one threat. 44 - > Simultaneously, we had Economic Crime and Corporate 45 - > Transparency ACTA, which is now live in a meaningful way, 46 - > including the failure to prevent fraud offense that came into 47 - > force in September 2025 for large organizations.
48 - > Then we had the anti-corruption strategy in 2025 published in 49 - > December last year, with 123 comments and a very direct 50 - > message that corruption is now being treated as a national 51 - > security threat, not merely regulatory risk. 52 - > We have a complete overhaul of the UK's new ML supervisory 53 - > architecture with the FCA set to become the sole professional 54 - > services supervisor, consolidating oversight from 22 55 - > separate professional body supervisors.
56 - > We had ongoing GMLSG revisions, we have updated FCA guidance on 57 - > the treatment of domestic pets. 58 - > We had a GM Treasury guidance on how digital identity 59 - > verification fits the CDD obligations, consolidation of 60 - > sanction lists, all those threat assessments being published by 61 - > OFSI, obviously companies house reform and mandatory 62 - > identification verification for existing directors. 63 - > And across the channel, EU is implementing the full AML 64 - > package, the ML regulation, the 6 AML directive, the AMLA, the 65 - > new EU authority, which begins supervision quite soon, and EI 66 - > does to introducing interoperable digital identity 67 - > wallets across member states.
68 - > So honest question is can anyone actually keep track of 69 - > all of this? 70 - > And more importantly, our firms building frameworks that can 71 - > absorb it. 72 - > So, Kathryn, to you. 73 - > So let's start with that big picture.
74 - > The UK had economic crime plans before, but something feels 75 - > qualitatively different about the current moment. 76 - > Maybe we can start from the economic crime plan too and what 77 - > it's actually seeking to achieve and why is 2026 such a 78 - > pivotal year for delivery. 79 - > Yeah, absolutely. 80 - > And that was an exhaustive list of everything that's uh that's 81 - > gone on.
82 - > I would actually maybe wind back in time a few years 83 - > actually, back to the last mutual evaluation of the UK by 84 - > the Financial Action Task Force or FATF in 2018. 85 - > Following that evaluation, which was broadly positive, 86 - > there were a number of areas where the UK really needed to 87 - > address the recommendations of FATF and demonstrate progress. 88 - > And those formed the basis of what then became the first 89 - > economic crime plan, which ran from 2019 to 2022.
90 - > I think what was really important about that, and which 91 - > has set the tone for a lot of the work since is that it was a 92 - > public-private document with a large number of actions across a 93 - > range of different areas, but it was very, very firmly owned 94 - > by both the public sector and the private sector. 95 - > Obviously, that expired in 2022 when we also saw the full-scale 96 - > invasion of Ukraine by Russia, which really changed, I think, 97 - > the context in which we were all operating.
98 - > Obviously, from a sanctions perspective, clearly, sanctions 99 - > suddenly became a really significant issue. 100 - > But more broadly, I think it gave a lot of impetus to dealing 101 - > with long-standing issues such as Companies House, which had 102 - > long been bugbears of many of us working in the system, but 103 - > where there hadn't really been that drive to address some of 104 - > the issues. 105 - > So following the conclusion of the first economic crime plan, 106 - > it was replaced by the second economic crime plan, which ran 107 - > from 2023 until this year.
108 - > And that again contained a huge number of actions across a 109 - > range of different disciplines around money laundering, fraud, 110 - > asset recovery, included the development of the 111 - > anti-corruption strategy as well. 112 - > Huge amount of work that's gone into that as well. 113 - > Um, and I think some really kind of sizable items that have 114 - > come out of it. 115 - > So you mentioned supervisory reform.
116 - > That was one of the commitments under ECP2. 117 - > Clearly, we are not implementing supervisory reform 118 - > yet. 119 - > We're in early stages, but actually to have that decision 120 - > made was such a significant turning point, I think, in the 121 - > UK. 122 - > But obviously, just because we've come to the end of ECP2 123 - > doesn't mean we've fixed economic crime at all.
124 - > And you mentioned the anti-corruption strategy, the 125 - > fraud strategy, or anticipating an anti-money laundering 126 - > strategy coming out over the summer. 127 - > Yeah, there's a huge number of international developments. 128 - > I mean, you reference what's happening at the EU, which is 129 - > obviously for any firms operating cross-border a really 130 - > significant issue. 131 - > And this issue of kind of regulatory divergence, I think, 132 - > is going to become a real top concern over the next few years.
133 - > But you've also got a number of other international 134 - > developments, let's say. 135 - > So we've got the UK-hosted illicit finance summit coming up 136 - > this year. 137 - > From the 1st of July, the UK will hold the presidency of the 138 - > FATF. 139 - > We've got the UK's presidency of the G20 coming up towards the 140 - > end of this year.
141 - > And the UK is really going to be at the forefront of the 142 - > international dialogue on some of these issues, I think, 143 - > particularly around the effectiveness agenda. 144 - > And now when I think when you look at a lot of the work that's 145 - > gone on, a lot of the things that you reference, particularly 146 - > from the UK perspective, digital identity guidance, 147 - > changes to the money laundering regulations, the supervisory 148 - > framework, a lot of that is very much rooted in this 149 - > effectiveness piece, which sort of comes from a FATF level right 150 - > down to how we operate on a day-to-day basis.
151 - > But there's a lot there, right? 152 - > There's a lot for firms to get their head round. 153 - > A lot of the ways in which we hope that these actions and 154 - > these strategies and the plans all coordinated, but there is a 155 - > lot for us all to, and that's policymakers, law enforcement. 156 - > There's just a huge amount of change.
157 - > I think it makes it really a difficult operating environment, 158 - > but it also gives firms a lot of opportunities to think about 159 - > how they can do things a bit differently. 160 - > That's a great 161 - > point. 162 - > It really strikes me that, you know, now that we have multiple 163 - > strategies running simultaneously under the what we 164 - > call and would describe as economic crime umbrella, like 165 - > the fraud strategy, anti-corruption strategy, AML 166 - > and asset recovery expected strategy.
167 - > From a regulatory intelligence perspective, that is enormously 168 - > complex for firms to track. 169 - > As you said, it can be a challenge. 170 - > So each one has its own timeline, its own lead agency, 171 - > its own set of obligations. 172 - > But the government's framing in that is that, you know, they're 173 - > deliberately interconnected, which they are.
174 - > So do you think the joined up narrative is lending with the 175 - > industry? 176 - > Are they able to interconnect all of that? 177 - > Kathryn Westmore: I think yes, to some extent, is probably my 178 - > answer. 179 - > I think what we've really learned from ECP1 and ECP2 is 180 - > the importance of a couple of things.
181 - > The first is the need for kind of really clearly defined, like 182 - > high-level objectives or principles that underpin the 183 - > policymaking, uh, which can drive all parts of the system in 184 - > the right direction and provide that strategic direction. 185 - > And I think, particularly in the context we're operating now 186 - > where we have some strategies, we're expecting more strategies. 187 - > I think bringing those all together with those kind of 188 - > principles, I think is really important, which I think also 189 - > links to the other point that we've learned, I think, from 190 - > ECP1 and ECP2, which is the importance of system leadership.
191 - > You mentioned how long some of these strategies are. 192 - > There are so many actions in them, partly because of the 193 - > timing, the way things have been developed. 194 - > Actions that you would expect to find in one strategy are 195 - > actually sitting in another strategy sometime. 196 - > And I think that demonstrates the importance of a kind of 197 - > system where there is clear leadership to coordinate all of 198 - > these actions.
199 - > And even going beyond that, when you look at some of the key 200 - > enablers across anti-corruption, across fraud, 201 - > across anti-money laundering, counter-terrorist financing, we 202 - > come back to some of the same key themes: data sharing, 203 - > public-private partnership, reform to the criminal justice 204 - > system. 205 - > All of these things are relevant to all the different 206 - > strategies that people are looking at. 207 - > So it's really important that those activities are coordinated 208 - > and joined up.
209 - > And I know certainly from a UK Finance position and talking 210 - > to a number of our members, there is this real desire to 211 - > have this kind of clear system leadership and clear, 212 - > high-level, overarching principles that ensure that all 213 - > of the great activity that's going on, whether that's public 214 - > or private sector, is brought together and that there is some 215 - > degree of oversight of everything so that things aren't 216 - > happening in isolation.
217 - > Katarina Pranjic: No, 100%. 218 - > It doesn't happen in the real world, right? 219 - > Criminal states don't operate in silence. 220 - > So I would definitely agree with you.
221 - > You know, we mentioned a couple of times, and I want to talk 222 - > about something that I personally think has been 223 - > underappreciated so for some time. 224 - > It's anti-bribery and corruption. 225 - > And it's now seems like it's back on the top of the agenda. 226 - > And I mean genuinely back, not just as a line in a strategy 227 - > document.
228 - > I really like that document, the strategy. 229 - > The strategy is notable to me for several reasons. 230 - > Besides the NCAA estimates that over 100 billion could be 231 - > laundered through the UK every year, frames corruption 232 - > explicitly as a threat to national security and economic 233 - > growth. 234 - > And it calls out sectors that have historically not uh 235 - > themselves as corruption, uh, been seen as corruption exposed, 236 - > like construction infrastructure, public 237 - > procurement, uh, local government, professional 238 - > football, with the new independent football regulator 239 - > being tasked with uh strengthening anti-corruption 240 - > capabilities.
241 - > There's also a focus on professional enablers, which is 242 - > a category that now includes lawyers, accountants, and 243 - > bankers. 244 - > I don't think any of this is like groundbreaking new, but do 245 - > you think corruption has moved up to the agenda so sharply 246 - > right now? 247 - > And uh what does that mean for financial institutions who have 248 - > tended to treat it as a separate risk stream from the fraud or 249 - > AML? 250 - > Kathryn Westmore: Yeah, I think you're totally right.
251 - > I mean, you've you've been in this game as long as I have 252 - > here. 253 - > We've seen the kind of waves of interest in the ABC agenda. 254 - > You know, we obviously saw back when the Bribery Act was 255 - > implemented back in 2010. 256 - > You know, a huge amount of focus on it then, and then 257 - > interest wanes, and then you get big cases in the news, then all 258 - > of a sudden the interest peaks again.
259 - > And I totally agree that it does seem to be pretty high on 260 - > the agenda. 261 - > Uh, I think that's probably for a couple of reasons. 262 - > I think it's probably still a sort of legacy of what we've 263 - > seen post the full-scale invasion of Ukraine and the 264 - > focus on the kind of kleptocracy and oligarchs there, and the 265 - > acknowledgement of how sort of interlinked corruption was with 266 - > some of that behaviour that we saw, um, and the link between, 267 - > you know, corruption and sanctions of Asian, for example.
268 - > So I think there is a very sort of real and tangible way in 269 - > which some of the issues around bribery and corruption have 270 - > manifested themselves that put it high on the agenda. 271 - > But I think broadly, there's probably a greater recognition, 272 - > I think we'll kind of talk about this in a bit more detail, um, 273 - > around that bribery and corruption itself does not 274 - > happen in a silo, as you said. 275 - > So when you look at kind of economic crime, financial crime, 276 - > illicit finance more broadly, corruption is often key in 277 - > facilitating those kind of financial flows.
278 - > And that could be as simple as corruption at the borders to 279 - > allow people to courier large quantities of cash between 280 - > jurisdictions. 281 - > That is a corruption issue. 282 - > That's a bribery issue there. 283 - > And a lot of the criminal activity that we see, whether 284 - > it's transnational organized crime, whether it's the 285 - > industrialization of fraud and the scam centers, corruption 286 - > underpins a lot of that activity.
287 - > And I think there's a really good graphic in the 288 - > anti-corruption strategy, which I will not do a very good job of 289 - > explaining, but with pointlessness to page 27 of the 290 - > strategy, where it kind of sets out where you have an individual 291 - > and what they're seeking to achieve and whether that's to 292 - > hide their wealth, protect their wealth, seek influence or 293 - > appear to kind of be legitimized and the techniques that they 294 - > might use.
295 - > So that could be buying real estate, it could be making 296 - > influential friends in high places, and all the various 297 - > sectors who can provide those services or can help in. 298 - > And you mentioned professional enablers, but obviously it goes 299 - > kind of broader than that. 300 - > And there's a whole range of different actors that can be 301 - > pulled into this kind of corrupt ecosystem as well. 302 - > And I think that recognition that bribery and corruption, 303 - > it's not just about companies in high-risk sectors bribing 304 - > public officials overseas to win contracts.
305 - > Yes, that is still a hugely significant issue. 306 - > And when we look at kind of SFO prosecutions, that's clearly a 307 - > real issue. 308 - > But it's actually much broader than that. 309 - > And that's what I think the anti-corruption strategy does a 310 - > good job of, which is kind of articulating the different ways 311 - > and the different mechanisms by which bribery and corruption are 312 - > kind of undermining society, the rule of law, prosperity, 313 - > national security.
314 - > 100%. 315 - > Katarina Pranjic: You're so right. 316 - > Corruption proceeds pass through the same financial 317 - > system and they're often using the same structures, the same 318 - > jurisdictions, same professional services gatekeeper. 319 - > So if you're a compliance professional who has been 320 - > treating ABC as a separate work stream to AML, the regulatory 321 - > direction, I think, is uh direction of travel is very 322 - > clear, telling us that those walls need to come down, right?
323 - > Which brings me naturally to the question of convergence. 324 - > There is something I feel quite strongly about. 325 - > So fraud, AML sanctions, and corruption are increasingly 326 - > being treated by regulators and government as a part of the same 327 - > ecosystem. 328 - > The criminal does not operate in silence, as I said.
329 - > And you know, so why do our compliance frameworks? 330 - > And let me put some numbers on the table. 331 - > LexisNexis Risk Solutions data shows that the net designations 332 - > to UK sanction lists increase by 175% year on year in 2025. 333 - > It's an amazing document if our listeners would like to read.
334 - > It's called the Sanctions Pulse. 335 - > Lots of different stats in there. 336 - > Then the NCA estimated that over 100 billion is laundered 337 - > through the UK annually. 338 - > Fraud remains the single most reported crime in England and 339 - > Wales.
340 - > These are not separate phenomena, they're 341 - > interconnected risk vectors. 342 - > So, what are you seeing from UK Finance members in terms of how 343 - > they're structuring their response to this convergence? 344 - > Kathryn Westmore: Yeah, it is such a key shape about that 345 - > thing about criminal operating silence, but it's totally true. 346 - > And I think we see, and you can see in press reporting, some of 347 - > these big transnational networks are moving money on a 348 - > huge scale.
349 - > And they're facilitating sanctions evasion, they're 350 - > laundering the proceeds from scam centers, they're moving 351 - > large quantities of cash, they're laundering the proceeds 352 - > of drug dealing on the streets. 353 - > In some ways, they are kind of predicate agnostic. 354 - > As you said, exactly these same techniques. 355 - > So moving the proceeds of corruption, they're moving the 356 - > proceeds of fraud, they're moving the proceeds of sanctions 357 - > evasion.
358 - > And there's you know some great cases. 359 - > I'm sure listeners will be familiar with the NCA's 360 - > operation destabilize the sort of activity in December 2024 and 361 - > some further activity at the end of last year, targeting a 362 - > Russian-speaking money laundering network operating in 363 - > the UK and other jurisdictions. 364 - > And yeah, they were engaged in ransomware, they were engaged in 365 - > kind of over-the-counter cash-to-crypto swaps. 366 - > And they were providing services to Russian oligarchs 367 - > who were looking to move money to get around sanctions.
368 - > So we have to start kind of treating these networks as what 369 - > they are, kind of networks of different individuals, groups, 370 - > but all working together to move money around. 371 - > And we can't look at it as a sanctions evasion issue or a 372 - > fraud issue or a money laundering issue because it's 373 - > not one of those, it doesn't sit neat in that categorization. 374 - > And I think certainly when we talk to some of our members 375 - > around some of the kind of complicated investigations that 376 - > they're doing, you know, they're uncovering really significant 377 - > networks in probably cash controllers and money mules and 378 - > this and this and this.
379 - > There are loads of different parts from it. 380 - > And whilst I would hate to use the term kind of FRAML, you 381 - > know, there definitely seems to be that greater awareness that 382 - > even if you need to manage the risks slightly differently from 383 - > a controls perspective, when it comes to the intelligence, the 384 - > investigations, that really needs to be brought together so 385 - > that you identify all part of the picture. 386 - > Obviously, again, when you're talking about a single 387 - > institution, they will only ever see a slice of the action, 388 - > which is when you kind of come back to then how are these risks 389 - > and threats managed in a broader sort of ecosystem 390 - > context?
391 - > How can we better use data sharing and intelligence sharing 392 - > to build up that picture of these networks that are 393 - > operating, that are facilitating all of this kind of 394 - > criminality? 395 - > And therefore, how do we have the most disruptive impact on 396 - > them? 397 - > Which also means, I think, adjusting what kind of success 398 - > looks like and what those kind of metrics look like. 399 - > A stat that I've often used, thanks to the NCA in Operation 400 - > Destabilize is the fact that when the Russian-speaking money 401 - > laundering network became aware of law enforcement interest in 402 - > them and cash careers were kind of getting picked up off the 403 - > street, the prices that they charged to organize crime groups 404 - > to launder money increased.
405 - > So their kind of commission rate increased, and the NCAA 406 - > could track that change. 407 - > And so what that disruptive activity did is not just 408 - > arrested people, you know, we led to sanctions, et cetera, but 409 - > it made it more expensive for criminals to launder money. 410 - > So where they were getting, you know, charged 3% fees for the 411 - > kind of professional money laundering services, it was 5%. 412 - > And that that adds up, right?
413 - > That making it more expensive, if criminals are profiting less, 414 - > they either have to take more risks to keep their kind of 415 - > profit margins alive, take the hit, um, or do things which 416 - > might open expose them to greater law enforcement 417 - > attention, whatever. 418 - > So actually, measuring success might come in a slightly 419 - > different way if we're treating this as a sort of networked 420 - > operation that we're trying to disrupt rather than kind of pick 421 - > off individual notes.
422 - > Katarina Pranjic: That is fascinating, Catherine. 423 - > I love it. 424 - > I feel like that could be a documentary episode itself, 425 - > probably. 426 - > It's an interesting perspective.
427 - > We don't really often talk about it that way. 428 - > You observe the regulation, obviously. 429 - > We talk about its effectiveness, is it working? 430 - > But, you know, there always I feel similar angles that we look 431 - > at from and seeing from in what you were just saying is to me 432 - > is fascinating, you know, the impact it can have on criminals 433 - > as well.
434 - > Brilliant. 435 - > So I think many firms they build their compliance functions 436 - > along product lines and risk type lines, and rewriting that 437 - > is not going to be quick. 438 - > But when you touched on the effectiveness, I think you 439 - > nailed it there because this is the one that I think the 440 - > industry has to be honest about. 441 - > That we're always asking the same question: is it working?
442 - > We have more regulations, more obligations, more designations, 443 - > more reporting requirements. 444 - > Um, but are we actually recovering the assets? 445 - > And I think it's a good time for us just to mention the asset 446 - > recovery strategy. 447 - > Just for the listeners that might be interested, we are 448 - > expecting that third strategy.
449 - > Do you got any insights for us, you know, in terms of when can 450 - > we expect that to be published? 451 - > And is it really going to be a game changer when it comes to 452 - > asset recovery? 453 - > What are the expectations in the industry? 454 - > Kathryn Westmore: Yeah, I can answer the easier question 455 - > first, which is I think we're still anticipating it to be out 456 - > by the summer, and that's driven by a lot of reasons.
457 - > But I think I would hope before we go into the sort of summer 458 - > break, we should have anti-money on joining asset recovery 459 - > strategy, which I think we certainly would welcome, 460 - > particularly with the ending of ECP2. 461 - > We certainly need something, not least when you consider that 462 - > we've got FATF assessors coming to do the onsite of the UK next 463 - > summer. 464 - > Clearly, we need to have something in place there. 465 - > In terms of your kind of specific question on asset 466 - > recovery, I mean, it's uh it's a difficult area and it's been 467 - > such a huge focus.
468 - > I mean, it's been a focus under FATF. 469 - > Um, it's been a focus from the UK perspective. 470 - > Obviously, there are significant upsides on all sides 471 - > in improving asset recovery response, whether that's 472 - > returning money to victims, um, repatriating funds to 473 - > communities that have been devastated by corruption, but 474 - > also whether it's um frankly creating schemes such as we have 475 - > at the moment where you get a portion of the funds that are 476 - > recovered invested back into the response, right?
477 - > Like that's a great source of income for law enforcement as 478 - > well. 479 - > So there's huge upsides to improving asset recovery. 480 - > It is tricky. 481 - > I mean, there is the you know that oft-quoted stat about how 482 - > how little, you know, or how few assets are actually recovered.
483 - > And certainly, while we've seen some areas of progress in the 484 - > UK, I think we probably haven't gone as far as fast as we might 485 - > want to go on asset recovery. 486 - > So I think it will be really interesting to see how the 487 - > strategy looks to address it. 488 - > I think that's against a backdrop of an illicit finance 489 - > summit hosted this year, where we expect asset recovery or 490 - > certainly criminal wealth to be a key element of that, both in 491 - > terms of looking at how it manifests through the kind of 492 - > priority thematic areas that the government have identified for 493 - > that summit of gold and property and crypto, but also more 494 - > broadly around how can we move forward as a global community?
495 - > And indeed, what's the UK's role in implementing some of the 496 - > uh recommendations we've seen coming out at a FATF level about 497 - > asset recovery? 498 - > So non-conviction-based asset recovery, for example, civil 499 - > forfeiture. 500 - > I think that's a huge opportunity there from an asset 501 - > recovery side. 502 - > Um, it's about building the right tools.
503 - > And, you know, so much of the asset recovery piece comes down 504 - > to the international collaboration aspect of it as 505 - > well. 506 - > So mutual legal assistance, information sharing, MOUs, all 507 - > of that stuff. 508 - > Where we're making good progress, but there are still 509 - > some significant barriers as well. 510 - > So I think there's a lot of good and interesting and quite 511 - > novel thinking uh that I've heard from different quarters 512 - > around asset recovery, um, the role of law enforcement and how 513 - > we can speed up the processes, etc.
514 - > So I think it's a watch the space when we see that draft in 515 - > July. 516 - > We can I'm sure we can have a further conversation about asset 517 - > recovery, but it is clearly something that is not working as 518 - > well as it needs to work fundamentally. 519 - > Katarina Pranjic: Oh, we just might, you know, in July we can 520 - > come back to this one. 521 - > I don't know.
522 - > I feel quite excited about it and um I look forward to see 523 - > what's in there. 524 - > It's such an important part of economic crime response. 525 - > So yeah, let's see what happens. 526 - > Well, I'll try to wrap it now and go to the last bit, but um, 527 - > equally important.
528 - > So I wanted to turn it to something that I think is 529 - > undervalued. 530 - > It's in public discussion. 531 - > The role of industry is actually shaping the regulatory 532 - > response now, rather than simply reacting to it. 533 - > I feel that collaboration really changed, you know, Lexis 534 - > Nexis Risk Solutions, we engage directly with regulators and 535 - > policymakers and industry throughout the consultations or, 536 - > you know, different working groups.
537 - > And it's amazing, you know, because we see a change, we see 538 - > that conversations being a lot more meaningful. 539 - > Um, we collaborate on so many different levels. 540 - > But, you know, UK Finance does similar work throughout the 541 - > working groups and you know, you connect the whole of the 542 - > industry. 543 - > And I know your team engages across the very wide range of 544 - > policy processes as well.
545 - > Can you talk about how the engagement works in practice and 546 - > why it doesn't matter, especially now, considering all 547 - > the reg changes that we just touched on? 548 - > Kathryn Westmore: Well, quite unsurprisingly, I'm going to say 549 - > that industry engagement is absolutely vital, whether that's 550 - > through UK finance or other forms. 551 - > But fundamentally, policymaking in an ivory tower doesn't work. 552 - > It's only when you actually engage with the people whose job 553 - > it is to operationalize the policy that you can really 554 - > appreciate the downstream implications, which will not be 555 - > the same for all firms.
556 - > UK finance, we speak on behalf of our members, but we also 557 - > realise that we have a wide variety of members with 558 - > different requirements, different products, different 559 - > services, different capabilities. 560 - > And the impact of policy change on them is going to look very 561 - > different. 562 - > It's a very different if you have a large globally operating 563 - > bank versus a small UK-focused wealth management firm. 564 - > And when there are policy changes, and you know, we talk 565 - > about the statutory instrument uh to the MLRs, for example, 566 - > that contains a lot of things that we collectively of an 567 - > industry have long argued for, but we also need to show that 568 - > there is an actual benefit to these things, you know, to these 569 - > changes that we've really been advocating for.
570 - > We need to show that we can now kind of take them and 571 - > operationalize them and that it actually leads to kind of 572 - > greater effectiveness. 573 - > And I think even now, after kind of all the consultations on 574 - > the money laundry searching instrument, you know, the 575 - > various different consultation processes that are fed into 576 - > that, the engagement that everybody's had, we're still 577 - > uncovering little knotty issues from practitioners, from kind of 578 - > first-line people who are saying, right, like how do I 579 - > translate this into my processes and my controls?
580 - > And actually flagging things that people haven't thought 581 - > about just because it might be a timing issue, or it might be an 582 - > actually, well, how does this work with this piece of 583 - > legislation? 584 - > Um, how do we get to the right level of comfort where we're 585 - > having to make more judgment-based decisions when it 586 - > comes to some of these things? 587 - > So I think good policy making needs to be rooted in that kind 588 - > of operational 589 - > dimension, which is not to say that policy making should be 590 - > driven by people saying, well, no, it's too hard.
591 - > Our systems won't do this, so we can't do it. 592 - > That's not what I'm saying at all. 593 - > But I think sometimes if you're not sufficiently engaged from 594 - > an industry perspective, you can end up writing policy or 595 - > writing legislative changes or regulatory changes with the best 596 - > of intentions, but they have unintended consequences and or 597 - > they don't have the impact that you're looking for. 598 - > So I think that collaboration and that shaping it 599 - > collectively, I think is so important.
600 - > And I do think in the economic crime world, the years that I've 601 - > been involved, that has progressed hugely. 602 - > I think the industry relationships with government, 603 - > with law enforcement, with supervisors, I think are in a 604 - > totally different place than they were a few years ago, you 605 - > know, a decade ago maybe. 606 - > And that collaborative approach, I think is hopefully 607 - > driving us more towards greater effectiveness, whether that's 608 - > you know reducing the number of low-value SARS in the system, 609 - > for example, that I think everybody wants, no matter what 610 - > perspective you come from.
611 - > Yeah, it's those kind of things where we really need to work 612 - > together to say, well, if we make this change, what does that 613 - > mean for industry? 614 - > What does that mean for this subsector, this subsector, this 615 - > subtext, what does it mean for the sectors outside the 616 - > regulated sector? 617 - > What does it mean for law enforcement? 618 - > So I think bringing those conversations together is 619 - > crucial because all of us, and that's anybody engaged in this, 620 - > no matter where you sit, government, law enforcement, 621 - > private sector, regulator, we're all pushing towards the same 622 - > outcome, right?
623 - > We're all in this business because we don't want criminals 624 - > to profit from their crimes. 625 - > And we want to reduce the harm from crime to society. 626 - > So we've all got a shared interest in getting this right. 627 - > And I think that collaboration has been something that has been 628 - > so, so vital.
629 - > Katarina Pranjic: I definitely agree with you. 630 - > That was great. 631 - > And um, you know, I want to leave something practical for 632 - > our listeners. 633 - > Maybe we can finish with the, you know, in terms of the key 634 - > dates to keep on the radar.
635 - > Is there something that you want to share with the 636 - > listeners? 637 - > Any kind of important dates to look out for? 638 - > Kathryn Westmore: Yeah, I mean, I think July is going to be a 639 - > big month. 640 - > Apologies if you've got holidays already planned for 641 - > July.
642 - > We don't know the exact timing yet, but we expect the statutory 643 - > instrument to come into force in probably early July, 644 - > expecting the anti-money laundering strategy, the illicit 645 - > finance summit at the end of June, which will contain a 646 - > number of commitments and positioning. 647 - > So I think July is quite a big milestone in my mind, which is 648 - > why I've booked the first two weeks of August for holiday. 649 - > So those I think are the kind of immediate pieces coming up.
650 - > But I think certainly over the next few months as well, 651 - > particularly as the attention really, really focuses to what 652 - > the FATF assessors need for the UK. 653 - > I think there's going to be a lot there where there'll be some 654 - > interesting engagement with the industry around how do we kind 655 - > of get the story together in a coherent way for the FATF 656 - > assessors. 657 - > So I think that's going to be something to look out for as 658 - > well.
659 - > I mean, there's so many different changes, you know, 660 - > there's so many consultations on the horizon, you know, looking 661 - > forward to regulatory, supervisory reform, et cetera. 662 - > So I think let's get through to July and we can kind of take 663 - > stock as to where we are. 664 - > But uh, you know, I do think, as I kind of said at the 665 - > beginning, there's so much going on. 666 - > There's so many great opportunities with the MLR 667 - > changes, with the MLR strategy, the FATF presidency, there's a 668 - > real change that, or we have the real opportunity, I think, to 669 - > really make a step change and make a substantive change in the 670 - > way that which we do things in the in the UK and really lean 671 - > into the kind of effectiveness agenda.
672 - > And I'd encourage firms to take advantage of that. 673 - > We have a regulator in the UK and the FCA who is really 674 - > starting to encourage that kind of behaviour. 675 - > So I think it's a great time to look at what you're doing and 676 - > thinking, right, in this new world, am I doing the right 677 - > things? 678 - > Katarina Pranjic: Brilliant.
679 - > I was asking about the practical advisor in that hope, 680 - > and it was so good. 681 - > Such a great deal. 682 - > Kathryn Westmore: I wonder how practical it is. 683 - > Katarina Pranjic: If you're planning for a holiday, if 684 - > you're working compliance role, this might be a good time for 685 - > you to go on holiday.
686 - > Amazing, amazing. 687 - > Um, Kathryn, this has been genuinely, you know, 688 - > illuminating conversation. 689 - > Loved it to bits. 690 - > Thank you so much for your time and for the clarity you bring 691 - > to the landscape and the passion that you bring to the industry.
692 - > It's been amazing. 693 - > Thank you so much. 694 - > Kathryn Westmore: No, thank you. 695 - > Thank you, For me I really enjoyed the conversation.
696 - > I think we could have kept going for a lot longer, and I 697 - > hope we will have the opportunity to do so again. 698 - > 100%. 699 - > Katarina Pranjic: Same, same here. 700 - > And uh to our listeners, if you want to explore the regulatory 701 - > developments we have discussed today or want to learn more 702 - > about UK Finance work, we will include links in the show notes 703 - > if you want to understand how LexisNexis Risk Solutions helps 704 - > organizations navigate the latest regulatory standards, 705 - > including horizon scanning, sanctioned screening, and AML 706 - > compliance, please do visit uh risk.
lexisnexis.co.uk. 707 - > Thanks everyone and stay tuned for the next episode of the 708 - > RegTech Pulse.
709 - > Bye.
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