SQA Consulting was acting as part of a skilled person team that was conducting a Section 166 review on a firm on behalf of the Financial Conduct Authority.
The requirement notice from the FCA required the skilled person to review the effectiveness of various key financial crime controls, including Transaction Monitoring (TM).
The section 166 requirement notice required:
SQA Consulting held interviews & walkthroughs with the TM team & reviewed relevant documentation. A sample of alerts was reviewed to determine how the firm would formulate decisions on alerts & whether they would be escalated & reported where appropriate.
The report contained observations on TM strengths & weakness, with root cause analysis & recommendations for management.
In particular, recommendations were made to include more dynamic rules such as:
A document such as this is exactly what a regulator is looking for, demonstrating that a thorough investigation has been conducted, with recommendations addressing any weaknesses.