UK government says Tesco Bank thefts shake confidence in finance
LONDON – The theft of money from accounts at Tesco Bank is a threat to national security and undermines public trust in financial firms, Britain’s interior minister Amber Rudd said on Thursday.
Retailer Tesco’s banking arm said this week that 2.5 million pounds was stolen from a total of 9,000 customers last weekend in what cyber experts say is the first mass hacking of accounts at a western bank.
Rudd said the government recognised financial crime such as cyber crime and money-laundering as a national security threat, which costs 24 billion pounds a year.
Britain cannot afford to be seen as a haven for dirty money, she added. “The recent example of Tesco Bank is a stark example of what we face,” Rudd told a Financial Conduct Authority (FCA) conference on financial crime.
The FCA watchdog has described the Tesco thefts as unprecedented. “Public confidence in our institutions get shaken by these sort of events,” Rudd said.
She was also “deeply concerned” by claims London is a major global money laundering centre, she said.
“Money laundering still poses a real threat both to the UK’s international reputation and integrity of our world leading financial centre,” Rudd said.
Britain’s National Cyber Security Centre, launched last month, is helping with the Tesco investigations, giving direct assistance to the bank, and identifying any wider lessons for industry, she said.
“The recent Tesco bank incident served to demonstrate that the private sector has a crucial role and a responsibility in countering cyber-enabled fraud,” she added.
FCA Chief Executive Andrew Bailey said the watchdog was not going to reduce its focus on financial crime anytime soon.
It will visit a random sample of smaller “higher risk firms” to flush out practical problems in applying anti-money laundering rules, such as checking the identity of customers properly.
The watchdog is also asking small firms for the first time to submit data on crime risks and will publish aggregate findings in June, which could include which countries are seen as most risky to do business with.
FCA head of financial crime, Rob Gruppetta, said it was worth exploring ways to cut compliance costs, such as centralising monitoring of transactions in banking, making it easier for banks to share information, and no longer making money laundering reporting officers criminally liable.
Bailey said automation could help firms cut the cost of complying with financial crime rules, and authorities should play a role in enabling such change to happen.
“The FCA should make it clear that firms don’t need to establish identity through physical production of paper passports and utility bills when this can be done by secure video link. BaFin, the German regulator, has published guidance on this and the FCA should follow suit,” law firm CMS said. -Reuters