New measures designed to reduce the risk of money laundering through the Post Office have today been set out by the FCA.
The regulator has brought together partners including the National Economic Crime Centre (NECC), the industry and the Government as part of a move to strengthen controls.
Post Offices are an important part of protecting access to cash for people and small businesses. FCA research has previously found that 6% of adults in the UK used cash to pay for everything over the 12 months from May 2021, with this figure increasing (9%) for those in vulnerable circumstances.
While most people have reasonable access to cash, the FCA said it is vital that any money laundering protections do not get in the way of legitimate customers and businesses accessing services at the Post Office.
The NECC has estimated that hundreds of millions are laundered each year through the cash deposit channel at the Post Office. While banks have made good progress in improving safeguards, including a 43% drop in the time taken to report suspicious activity at Post Offices, the regulator suggested there is “still more work to do”.
Measures set out for banks today include a move towards card-based transactions and away from paying-in slips, where possible, to allow enhanced monitoring. The FCA also intends to up-skill staff to be able to spot patterns of suspicious activity, as well as enhancing monitoring capabilities in banks which allow them to identify suspicious activity.
The regulator also wants to reduce cash deposit limits at the Post Office, subject to customer arrangements, to below the existing limit of £20,000 per transaction. It suggested that banks should take a “data-led approach” and consider whether a tailored offer is appropriate.
Executive director of consumers and competition at the FCA, Sheldon Mills, commented: “We have worked in partnership with law enforcement, industry and government to ensure people and businesses can still draw on the vital cash banking services provided by the Post Office, while addressing gaps that criminals could abuse.
“This important work is part of the FCA’s three-year strategy on reducing financial crime and increasing consumer protection.”
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