In a speech on Thursday at the FCA Financial Crime Conference in London, Bailey said that recent years have been associated with a crisis in financial conduct.
“Sadly, this has taken several forms – involving retail and wholesale consumers and users of financial markets.
“This begs the important question, how effective has the financial system been in providing effective prevention of financial crime?” he asked.
“Over the last 30 years, there has been a progressive expansion of the scope of regulation to address the risks of financial crime. This has not just happened out of nowhere, it has not just come out of the proverbial ether."
While Bailey view the progressive growth in global trade, greater movement of capital and funds across borders, and technological advancements as beneficial for the world economy, he added that “they do have side effects, and among those is the increased scope, both domestically and internationally, for financial crime to take place”.
"We do not intend to reduce our focus on financial crime, particularly given the evolving risks that exist and the level of public interest in ensuring the cleanliness of financial services.”
The result has been a “very challenging landscape for the work of preventing financial crime”.
Down but not out
The constantly evolving nature of financial crime is such that “we cannot promise to beat it entirely”, Bailey said.
“But [we] can promise to continue to focus on tackling the risks it poses to consumers, firms and the integrity of the financial system.”
Bailey cited a number of hurdles that stand in the FCA’s way when it comes to “adapting to meet the changing face of financial services in the UK”.
These include the diverse and complex needs of consumers, who are also increasingly having to take more personal responsibility for their financial decisions.
The growing number of firms coming under the FCA’s remit also makes the regulator’s response to financial crime more challenging.