FCA screening refers to the set of compliance checks required by the UK Financial Conduct Authority (FCA) to ensure firms prevent financial crime, money laundering, and sanctions breaches.
These screening obligations cover customers, employees, transactions, and business partners. For regulated firms, failing to meet FCA screening expectations can result in significant fines, reputational harm, and even loss of operating licenses.
FCA Screening
FCA screening is the process of applying the systems and controls required by the FCA to identify and mitigate financial crime risks.
This includes:
Customer screening against sanctions, politically exposed persons (PEPs), and adverse media
Employee and fitness screening to ensure staff meet suitability and integrity requirements
Payment and transaction screening to detect suspicious activity
Ongoing monitoring of risks across customers and counterparties
The FCA’s Handbook (SYSC 6.3) requires firms to establish systems and controls to prevent financial crime.
Why FCA Screening Is Important
Screening is essential to demonstrate compliance with FCA rules and maintain trust in the UK’s financial system.
Without effective screening controls, firms risk:
Financial penalties from enforcement actions
Reputational damage and loss of clients
Increased exposure to money laundering and terrorist financing risks
The FCA has reinforced its expectations through enforcement cases and industry guidance, making clear that firms must take proactive steps to screen customers, payments, and staff.
Key Elements Of FCA Screening
Effective FCA screening requires multiple layers of control:
Customer Screening
Verifying clients against sanctions, PEP, and adverse media lists. Customer Screening systems provide ongoing monitoring.
Watchlist Management
Maintaining up-to-date sanctions and risk lists, ensuring accurate data to reduce false positives. Watchlist Management systems streamline compliance.
Payment Screening
Checking payments in real time to detect sanctioned entities or high-risk jurisdictions. Payment Screening ensures no prohibited transfers are processed.
Transaction Monitoring
Using monitoring systems to detect suspicious transaction patterns and escalate alerts. Transaction Monitoring supports FCA suspicious activity reporting requirements.
Alert Adjudication
Investigating and resolving alerts through structured workflows, escalating true risks to regulators when necessary.
FCA Screening In Practice
Firms must implement FCA screening throughout the customer lifecycle and business operations:
Screening customers at onboarding and during periodic reviews
Monitoring payments and transactions in real time
Conducting employee fitness and propriety checks
Reporting suspicious activity through Suspicious Activity Reports (SARs)
The FCA’s Financial Crime Guide emphasises that firms must maintain adequate systems and controls to detect and prevent financial crime, including through screening.
The Future Of FCA Screening
FCA screening will continue to evolve alongside regulatory priorities and technology developments:
Digital transformation: AI and machine learning will improve the accuracy of screening while reducing false positives.
Real-time expectations: Faster payments and instant transfers will demand continuous, real-time screening.
Greater accountability: Senior managers under the FCA’s SMCR regime will face personal accountability for screening failures.
Cross-border alignment: FCA screening will increasingly align with FATF standards to strengthen global consistency.
Strengthen Your FCA Screening Controls
Firms regulated by the FCA must demonstrate effective screening processes across customers, payments, and staff. By combining Customer Screening, Watchlist Management, Payment Screening, Transaction Monitoring, and Alert Adjudication, institutions can align with FCA expectations and reduce compliance risks.
