Crime arising from money laundering costs UK £37bn every year
Serious organised crime that money laundering facilitates costs the UK £37 billion every year, according to the FCA.
In delivering a speech at the Royal United Services Institute, Megan Butler, executive director of supervision at the FCA, revealed that although no one can be sure how much money is laundered through the UK, the watchdog’s best estimate puts it in the range of hundreds of billions of pounds.
It is also estimated that the serious organised crime that money laundering facilitates costs the UK £37 billion every year, while the annual cost of fraud in the UK stands at a staggering £190 billion.
“But mere facts and figures alone don’t convey the incalculable damage these activities cause to our society,” Ms Butler said.
Recent research revealed that in the last year, the FCA has seen a 17 per cent increase in fraud offences, driven by an increase in bank and credit account fraud to 3.8 million offences.
“Whether inflicting punishing personal losses or threatening the ability of organisations to stay in business, the impact of these offences is devastating,” Ms Butler noted.
She explained that although there are requirements in place that aim to combat fraud, money laundering and terrorist financing, the fast pace of technological change means that these systems and controls do not always change as quickly as the threats themselves.
“Our joint endeavour is to monitor entry, devise controls and erect barriers powerful enough to stop criminals from causing further harm. The task is daunting,” Ms Butler admitted.
She pointed out that with over 5 million people choosing to lead an almost cashless lifestyle this year in the UK, the opportunities to exploit weaknesses in the system are evolving.
“Continuous innovation is vital if we’re going to stop criminals in their tracks,” Ms Butler opined, adding that AI and machine learning could really make the difference.
She encouraged individuals and businesses to “experiment with new technology” and join the FCA in tackling criminals who want to exploit the financial system.
“We focus on outcomes – and if a new innovation can help reduce harm, we welcome it,” Ms Butler said.
“We all have a public duty to explore all opportunities to combat crime. Together, we need to turn technology against criminals.”