Tackling financial crime requires radically-different operating model: Nikhil Rathi

Take investment fraud. A personal tragedy, and one many of us have seen touch friends or family; leaving them grappling with an average loss of over £25,000 – a life-changing amount of money.

But they’re losing more than money: confidence, security and, too often, their sense of self. However, zoom out and you’ll find something even more troubling.

Farms of people, thousands of miles away, working to target as many people as possible. And proceeds that flow back into criminal enterprises funding more heinous crimes. The kind with a human cost, both here and abroad.

These groups are blending fraud, money laundering, sanctions evasion and cyber‑enabled crime.

Putting at risk trust in the whole financial system, even economic growth. Funds that could be productively invested, diverted instead into criminal coffers. Our response has to be just as broad and adaptable.

Because the reality is that our financial system is part of that supply chain – exploited by criminals moving dirty money through complex layers designed to stay hidden.

And, increasingly, there are links with actors connected to some states who are deliberately weakening trust in our institutions and exploiting openness in our systems. Using their ill-gotten gains to fund other illegal and destabilising activity – whether on the streets of Khartoum or Carlisle – while staying below the radar.

The damage reverberates far beyond a single victim. It destabilises our society – eroding trust in our institutions, financial system and each other. That’s the scale of what we’re dealing with.

This is a question of fundamental economic and national security. No single organisation can see that threat clearly – or disrupt it effectively – alone.

Financial services. Technology and infrastructure providers. Regulators. Government. Law enforcement. Consumer groups.

As a collective, we have a question to face honestly: Are the ways we’ve traditionally tackled financial crime still fit for the environment we are now operating in?

For many of us, the answer will be no. How many of us have felt, at times, that fighting financial crime is like whack‑a‑mole? One threat disappears. Another pops up somewhere else.

Historically, we’ve organised our responses around institutional boundaries. Each firm or authority focused on its own remit and responsibilities. That may have made sense when threats were slower and easier to contain..

So we need to update our thinking – fast. It requires a radically different operating model. One designed for the reality we face – faster, more connected, and more focused on outcomes.

This is not regulators versus industry versus consumer. We are on the same side, with the same adversary; the criminal. If we get this right, the payoff is significant.

Strong defences strengthen trust. Trust that encourages financial participation, inclusion and resilience. And trust that underpins the growth, competitiveness and security of our financial services system and country.

Teamwork and a partnership that spans sectors and borders is our strongest weapon against financial crime.

Nikhil Rathi is chief executive of the FCA. This is an edited version of a recent speech.