A new levy on UK banks and other regulated financial institutions will “redress the balance” when it comes to the impact of financial crime on the wider community, according to Encompass CEO and co-founder, Wayne Johnson.
In his first Budget, unveiled earlier today, Chancellor Rishi Sunak announced plans for an Economic Crime Levy to generate cash for new technology for law enforcement and to hire more financial investigators.
It will “help fund new government action to tackle money laundering and ensure delivery of the reforms committed to in the Economic Crime Plan”, the Treasury said.
The levy is likely to come into force in 2022/23, with the Treasury consulting in the coming weeks about which firms will be asked to contribute.
It comes after the government and business leaders last year agreed an Economic Crime Plan, focusing on increased spend and improved information sharing, to try to stamp out money laundering.
Reacting to the latest development, Wayne said:
Financial crime in the UK is still very much prevalent and, despite extensive efforts to tackle it, dirty money is still peddled through UK banks and financial services institutions every day.
There is no denying that banks have come a long way in regards to the work that they do to counter this problem but the fact that the financial landscape is constantly evolving, coupled with the increasingly sophisticated methods being used by criminals who are more tech-savvy than ever before, means it is difficult for them to keep up with these criminals.
It’s great to see the issue being faced head-on with plans for a sizable investment in new enforcement and regulation tactics.
This will be able to fund new investigative technology, the effectiveness of which can not be understated: cutting-edge Know Your Customer (KYC) regulation technology, for example, is extremely valuable when it comes to enhancing the efficiency and quality of banking due diligence, providing comprehensive background checks on companies from all sectors of domestic and international business.
The impact of Anti-Money Laundering (AML) on the economy cannot be underestimated and, essentially, a levy such as this is designed to deal with the downstream costs of money laundering to society.
What we see is that, because of this level of criminal activity, the tax burden falls on a smaller number of people. Community financial costs need to be taken into account and an introduction such as this is a logical strategy, which goes some way to redressing the balance.
If regulators and law enforcement have the means to investigate financial crime more effectively, they can share this vital information with banks who, in turn, can make the relevant changes to their policies and processes that will allow for more effective AML in the future.
[three_fourth_last]about Wayne Johnson
Wayne co-founded Encompass in Sydney and took the Encompass product to market there in 2012. Since then, as CEO he has led the international expansion of Encompass, including the launch in the UK in 2015 and Singapore in 2018, and recognition as one of the UK's most influential RegTech firms.
Prior to Encompass, Wayne was co-founder and CEO of Software Associates, until the company's successful exit to a Hong Kong listed Company.
Connect with Wayne on LinkedIn.
Founded in 2012 by entrepreneurs Roger Carson and Wayne Johnson, Encompass is the creator of unique, innovative Know Your Customer (KYC) automation software that enables better, faster commercial decisions. The company is driven by the belief that the best decisions are made when people understand the full picture, fast.
Contact us today to arrange your personalised consultation of Encompass. Discover how our KYC automation software can help your business accelerate onboarding and give you peace of mind that you are regulator ready.